The following message was updated on 3/22/2023 9:47:51 PM.
Insane Discount so close to Reset
ET-C. I bought a ton in Q4 and flipped in Q1. Solid cap gains/dividend flip. Now a $1 below what I exited my position at so I'm at it again. Reset is May 15th.
Yield will be in the mid 9% range upon reset. May's dividend should not impact the share price much if at all since the preferred is callable. Will ET call C? I believe the odds are favorable, but either way the discount should narrow considerably and there'll be a nice bump up in the yield. Please do your own due diligence.
Energy Transfer Operating L.P., 7.375% Series C Fixed/Float Cumul Red Prfd Units
QUANTUMONLINE.COM SECURITY DESCRIPTION: Energy Transfer Operating, L.P. formerly Energy Transfer Partners, L.P., 7.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, liquidation preference $25 per unit, redeemable at the issuer's option on or after 5/15/2023 at $25 per unit plus accrued and unpaid distributions, and with no stated maturity.
Cumulative distributions of 7.375% per annum ($1.84375 per annum or $0.4609375 per quarter) will be paid quarterly on 2/15, 5/15, 8/15 & 11/15 to holders of record on the record date that will be the first Business Day of the month of the Payment Date (NOTE: the ex-dividend date is one business day prior to the record date). On and after 5/15/2023, distributions on the Units will accumulate for each distribution period at a percentage of the $25.00 liquidation preference equal to an annual floating rate of the three-month LIBOR plus a spread of 4.530% per annum.
Holders of the Preferred Units will receive specific tax information from the company, including a Schedule K-1 which generally would be expected to provide a single income item equal to the preferred return (see page 63 of the prospectus for details).
Upon a Rating Event, the issuer may redeem the Units, at a price of $25.50 per Unit plus an amount equal to all accumulated and unpaid distributions.
This security was rated as Ba2 by Moody’s and BB by S&P at the date of its IPO. In regard to the payment of distributions and upon liquidation, the preferred shares rank junior to the company's senior debt, equally with other preferreds of the company, and senior to the common shares of the company. See the IPO prospectus for further information on the preferred stock by clicking on the ‘Link to IPO Prospectus’ provided below.