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They have a preferred issue, Mirant Trust I (nyse: MIR.A), that's yielding in the17% to 18% range plus it's convertible.
I am recommending that my subscribers hold on to this trust preferred issue, but be prepared for a roller-coaster ride in pricing.
One area of opportunity that the company seems to have overlooked is in addressing its $345 million 6.5% convertible trust preferred issue.
For Lehmann, the appeal of the Constellation preferred issue is twofold: the high yield of 4.46%, taxed at only 15%, plus the conversion feature, which produces 0.7319 shares of common stock.
GM will use proceeds from its $4 billion plus preferred stock issue to redeem the Treasurys 9 percent preferred issue as well as make a $4 billion equity contribution to its pension plans, both plus factors.
And a WorldCom preferred issue traded at $3.15 a share, or 87percentt below par.
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In the second episode, he explained why he preferred issuing executive orders: "I get to make people do whatever I want".
That is exactly what happened recently with trust preferred issues from JPMorgan and Citigroup.
Also, in 1996 banks were allowed to count preferred issues as part of their statutory capital, which defines how much they can lend.
There are 15 different GM preferred issues that I like, such as the General Motors (19, HGM) issue, a 7.375% senior note due Oct. 1, 2051; these preferreds yield 9.75%.
However, five major challenges have emerged: Companies tend to prefer issues where they can objectively measure before and after performance so that they can report on it.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com