Redeemable Preferred Shares – only 2 remaining

I’m going to track back to my previous post on the matter of redeemable preferred shares and point out today that Birchcliff preferreds (TSX: BIR.PR.C) traded at $24, which if you put back to the company on June 30, 2020 will result in roughly a 12% YTM. There is the equity risk of the company choosing to redeem in shares at 95% of weighted average trading prices, or a $2 minimum, which BIR equity is trading awfully close to. The company itself, however, even with depressed natural gas markets, is in no danger of becoming insolvent as its line of credit is healthily above the redemption amount of the preferred share series (CAD$50 million), coupled with the fact that the equity itself (despite management shrewdly engaging in a self-enrichment process at their last annual general meeting) appears relatively cheap.

Mentioning that you purchased these preferred shares is not going to draw much of a crowd at cocktail parties, however.