WFS.PR.A Credit Quality Improves after Massive Retraction

Mulvihill Asset Management has announced:

In connection with the special retraction right granted to shareholders pursuant to the extension of the term of the Company approved by shareholders on May 31, 2011, the Company is announcing a consolidation of the Class A shares effective the opening of trading on July 4, 2011. The consolidation will ensure that an equal number of Class A shares and Preferred shares are outstanding subsequent to the special retraction. Each Class A shareholder will receive 0.562426082 Class A shares for each Class A share held. The total value of a shareholder’s investment will not change, however, the number of Class A shares reflected in the shareholder’s account will decline and the net asset value per share will increase proportionately. Investors are advised that the CUSIP number will change to 98146P301. No fractional shares will be issued and shareholders are not required to take any action for the consolidation to be effective.

Given that the Whole Unit NAV on June 23 was only 10.58, even the retraction of nearly half of the preferred shares and consolidation of the capital units doesn’t help much: asset coverage will still be only about 1.1:1 following the reorganization.

WFS.PR.A was last discussed on PrefBlog in the post WFS.PR.A Term Extension Approved. WFS.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

One Response to “WFS.PR.A Credit Quality Improves after Massive Retraction”

  1. […] was last extended in 2018. The 2011 extension resulted in a massive […]

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