AmTrust Baby Bonds: A Safe 10.3% Yield From An A- Rated Insurance Company

2018 was a great year for AmTrust Financial Services Inc. shareholders. The common stock rallied as the company was taken private. The AmTrust baby bond and preferred stock holders were not as fortunate. The privatization and subsequent delisting caused a selloff in these issues. This article is focused on the AmTrust baby bonds. I have provided 10 reasons why income investors should consider the baby bonds. The major risk factors are also highlighted.
The baby bonds AmTrust Financial Services 7.25% Sub Notes AmTrust Financial Services 7. AmTrust Financial Services 7.25% Sub Notes AmTrust Financial Services 7.25% Sub Notes (NYSE: AFFS) is a par $25 7.25% subordinated note maturing on 6/15/2055. Interest is paid quarterly on 3/15, 6/15, 9/15 and 12/15 to holders of record on 3/1, 6/1, 9/1 and 12/1. Note that the x-dividend date is one business day prior to the record date. AFFS now yields 10.3% at a recent price of $17.55. AFFS may be called at par starting on 6/18/2020. There are 6 million shares or $150 million par value of AFFS outstanding. See prospectus for additional details.
AmTrust Financial Services, 7.50% Subordinated Notes due 9/15/2055 (OTCPK: AFFT) is a $25 7.50% subordinated note maturing on 9/15/2055. AFFT has the same payment dates, record dates and x-dividend dates as AFFS. AFFT now yields 10.3% at a recent price of $18.20. AFFT may be called at par starting on 9/16/2020. There are 5.4 million shares or $135 million par value of AFFT outstanding. See prospectus... Read more

Older articles featuring MHLD: