FCS.PR.B Credit Quality to Improve

PrefBlog’s awesome power has been illustrated yet again, as Faircourt Asset Management, the Manager of Faircourt Split Trust , has announced:

that $13,996,390 in aggregate principal amount of the Trust’s outstanding 6.25% Preferred Securities (the “Preferred Securities”) will be redeemed on July 22, 2011 (the “Redemption Payment Date”). The record date of the Preferred Securities partial redemption is July 15, 2011.

Proceeds from the Preferred Securities redemption will amount to $10.0377 for each $10.00 principal amount of Securities, being equal to the aggregate of (i) $10.00 (the “Redemption Price”), and (ii) all accrued and unpaid interest hereon to but excluding the Redemption Payment Date (collectively, the “Total Redemption Price”).

The interest upon the principal amount of Preferred Securities called for redemption shall cease to be payable from and after the Redemption Payment Date, unless payment of the Total Redemption Price shall not be made on presentation for surrender of such Preferred Securities on or after the Redemption Payment Date or prior to the setting aside of the Total Redemption Price pursuant to the Indenture.

Securities will be redeemed pro rata from each beneficial holder of Securities pursuant to the procedures of CDS Clearing and Depository Services Inc. Beneficial holders of Preferred Securities should contact their broker with any questions regarding the redemption.

The size of the preferred share redemption exactly counterbalances the unmatched Capital Unit retraction discussed on PrefBlog in the post FCS.PR.B Credit Quality to Deteriorate.

FCS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

2 Responses to “FCS.PR.B Credit Quality to Improve”

  1. [...] matter of interest, with an unmatched retraction of capital units on June 30 being followed by a a matching redemption of preferred securities shortly afterwards. As with many other investment vehicles, the fund is now slightly behind where [...]

  2. [...] for FCS.PR.B, this implies that the Asset Coverage Ratio is a pretty awful 1.2-:1. Faircourt has in the past occasionally reacted to low Asset Coverage by redeeming Preferred Shares, but there is no guarantee [...]

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