{"id":4410,"date":"2008-12-10T19:27:52","date_gmt":"2008-12-10T23:27:52","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=4410"},"modified":"2008-12-10T19:27:52","modified_gmt":"2008-12-10T23:27:52","slug":"stwpra-stealth-redemption-confirmed","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=4410","title":{"rendered":"STW.PR.A: Stealth Redemption Confirmed"},"content":{"rendered":"<p>The essence of the redemption <a href=\"http:\/\/www.prefblog.com\/?p=3961#comment-45483\">noted by Assiduous Reader <i>erikd<\/i><\/a> has been confirmed:<\/p>\n<blockquote><p>STW.PR.A has been called at $10.2 + accrued for total of $10.3173913 per share. 33.8575% of preferred shares have been called. This is a good premium to last friday\u2019s trading price.<br \/><b>&#8230;<\/b><br \/>source is bloomberg, under news of the capital shares<br \/>\nI grabbed the screen at work. It will trade ex-redemption on Dec 9th, and supposed to get redeemed on Dec 12th.<\/p><\/blockquote>\n<p>I have confirmed with <a href=\"http:\/\/www.middlefield.com\/offices.htm\">investor relations at Middlefield<\/a> that the size is at least approximately correct; the redemption price per the <a href=\"http:\/\/www.middlefield.com\/pdf\/strata\/prospectus.pdf\">prospectus<\/a> is indeed 10.20.<\/p>\n<p>The closing quote on Dec 8 &#8211; the last cum-redemption day, according to <i>erikd<\/i>, and the day he posted his note &#8211; was 9.11-18, on volume of 9227 shares. Yesterday was 8.64-87 on 5,294 shares. Today was 8.80-26, 13&#215;2 on no volume.<\/p>\n<p>I don&#8217;t know when the information was posted on Bloomberg, but if I had sold shares prior to the ex-redemption date and after the posting, I&#8217;d be pretty upset. According to me, a sizable redemption at a premium of more than 10% to market price counts as material information. Nothing was on their website, and investor relations could not confirm or deny immediately.<\/p>\n<p>Their investor relations representative emphasized that they were not in breach of regulatory requirements. That may well be the case (it is not my place to judge) but I will suggest that:<\/p>\n<ul>\n<li>The redemption was material information.\n<li>Bloomberg is a paid service; advising Bloomberge does not (or should not) constitute public disclosure\n<li>Therefore &#8211; whatever the strict legalities might be &#8211; I consider this a case of selective disclosure\n<li>If Middlefield did indeed follow minimum regulatory standards, that&#8217;s not good enough. They should have more consideration for their investors&#8217; interests than that.\n<li>Let&#8217;s see a press release next time!<\/ul>\n<p>I will also be most interested to learn whether Middlefield purchased preferred according to the <a href=\"http:\/\/www.prefblog.com\/?p=1896\">issuer bid<\/a>. I will suggest that, given that STW.PR.A has <a href=\"http:\/\/cxa.marketwatch.com\/TSX\/en\/Market\/pricehistory.aspx?symb=STW.PR.A&#038;sid=1663452\">not closed above 9.60 in at least a month<\/a>, it would have been in the best interests of the fund to have exercised this right to the maximum extent possible.<\/p>\n<p>I have noted a <a href=\"http:\/\/www.prefblog.com\/?p=434\">previous STW.PR.A stealth redemption<\/a>.<\/p>\n<p>STW.PR.A is tracked by HIMIPref&trade; and is part of the InterestBearing subindex. Given the <a href=\"http:\/\/www.middlefield.com\/strata08.htm\">low asset coverage ratio<\/a>, it will probably be downgraded at some point in the near future at which point it will be relegated to &#8220;Scraps&#8221;. It is also possible that reduced liquidity due to the reduced float will be a prior cause for relegation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The essence of the redemption noted by Assiduous Reader erikd has been confirmed: STW.PR.A has been called at $10.2 + accrued for total of $10.3173913 per share. 33.8575% of preferred shares have been called. This &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,13],"tags":[],"class_list":["post-4410","post","type-post","status-publish","format-standard","hentry","category-better-communication-please","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/4410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4410"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/4410\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}