Re: Flipper-
In response to the last two posts...........
I beat this up with one of my brokers who takes interest in these quirky situations (and has sold just a few clients on the Gabelli pfds).
My argument has essentially been that if the Gab Fs remain outstanding, the GDL Bs are over priced.
Well I had him query his preferred desk and while they don't follow CEF pfds they did OPINE that there really is not much demand for a 6% PERPETUAL preferred even if it is AAA. This would account for why all the currently callable Gabellin pfds (5.875-6.625%) aren't being called.
Gabelli simply can't economically refinance them. OKAY. I'll accept that.
Secondly, a AAA one year pfd at 3% IS worth roughly par. Particularly if it will always reset to 3% or higher for a remaining two years or even three years. It certainly beats a tenth of a percent. And, with a little convincing, there should be a lot or folks that will take that as a money market alternative, liquidity not with standing.
So, it seems that on both counts I have been too doubting yet, it leaves me with the same question you have, i.e., will enough owners decide to put back the B in March, at $50, or not? The mere threat that it may occur in meaningful size ought to force Gabelli to do some kind of rights offering. Without one, I will definitely put mine back in March as I doubt I will want a two year 3%(to next put in 2015) while the current 6%-ish pfds go begging?.
I suspect the uncertainty of semi-permanent financing might cause them to go back to Perpetual issues (maybe with 5 or ten year put dates) and hopefully pay lower divvy rates, like 4.5-5.5%? |
