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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (32890)	12/3/2008 1:35:53 PM
From: E_K_S	Read Replies (1) of 78702

I started a position in the BRANDYWINE RTY PFD C (NYSE: BDN-PC) 7.50% Series C Cumulative Redeemable Preferred Shares These preferred shares were originally issued on 12/29/03 at a price of $25.00. From their original prospectus below:"... The Series C Preferred Shares will rank senior to our common shares of beneficial interest, which we refer to as our Common Shares, and on a parity with our 750,000 outstanding 7.25% Series A Cumulative Convertible Preferred Shares ($50.00 liquidation preference) which we refer to as our Series A Preferred Shares, and any other parity securities that we may issue in the future (including additional Series C Preferred Shares)...." yahoo.brand.edgar-online.com The Series C preferred shares pay $0.4688 per quarter ($1.875/year) which now yields 25% at the current price of $7.50/share. This is a cumulative preferred with a callable value set at $25/share. The proceeds of this issue was used to pay off their Series B preferred shares (in Jan 2004) that were a 8.5% cumulative preferred. ================================================================= My thought on starting a small position in this preferred is that this is like owning the debt of the REIT. I fully expect the common dividend to be cut while the preferred continues to be paid. BDN might do what Post Properties announced yesterday ( reuters.com ) where they cut their common dividend by 55% and announced a small buy back of their common or preferred shares. Their 7 5/5% preferred "B" shares were up 9% on the announcement. Because this is a cumulative preferred, the dividends are accumulated in the event the distribution is cut or eliminated for a few quarters. These accumulated dividends must eventually be paid off or distributed from any proceeds from a BK. This is either a deep discounted value play or just another value trap. Buyers beware. I sold some Comcast Corporation (CMCSA) to buy this starter position which I hold in my IRA. EKS EDIT: Lehman had a sizable position (SEC report 2008) which I believe will be liquidated in their BK that has (or will) provide an excellent entry point for this security.

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