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Is anyone familiar with NCT and its tender for its preferreds......?


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NCT is a Fortress-affiliated MREIT holding a variety of commercial and residential CDOs, REIT debt and other fixed income instruments.


They made a prior tender offer in early October that would have stripped its preferreds of their dividend rights in exchange for a below-par ($25) cash payment (granted, these things did trade below $1 in the last year). This led to a revolt by several large holders and now earlier this week, the company made a second tender that would not remove the dividend rights but still required a tender by a majority of pfd holders.


I note that these preferreds (NCT_pb, NCT_pc, NCT_pd) are cumulative and will have the right to seat two independent directors if the dividend arrearage goes through April 30th. This may be a motive for managment as well as the fact that a tender at a steep discount should be highly accretive to common. I don't think the preferreds would trade at par even if they were paying, but I do believe the tender does not reflect their intrinsic value, given that NCT is cash flow positive and has meaningful excess capital. I think this tender fails and NCT comes back with a higher number, maybe one that offers a combination of cash and common so the pfd. holders get some upside participation. The April 30th date would also tend to be an incentive for NCT to get a deal done. 


Wednesday's tender offer:



Their most recent conf call is here:



Anyone familiar with it?

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