CHS To Issue 6.7 Million Preferred Shares

By: Tim McPartland, July 10, 2017

CHS (Cenex Harvest States) has announced the intention to issue 6.7 million preferred shares to their cooperative members in exchange for members equity.

THIS IS NOT A NEW PREFERRED ISSUE. None of these shares will be sold by the company–all shares will go to members in exchange for members qualified equity.

The shares to be issued are the Class B, 7.875% $25/share preferred (ticker:CHSCO)which is trading at $29.36. These share MAY get slammed tomorrow (Thursday) which would present a buying opportunity–or at least a quick flip opportunity. Currently there are 10 million shares of this issue outstanding so 6.7 million shares of new liquidity is a meaningful number. The deal is not slated to close until August 31st.

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We will not act on this for our accounts unless it falls a couple dollars.

Tim McPartland

Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.

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