Friday, May 27, 2011

KTX Redeemed on 5/26/2011 at $25.3676 per Trust Certificate Plus Accrued Interest

These redemptions are really starting to irritate LB, who almost lost its cool when it noticed this morning that KTX had disappeared from two accounts.  KTX was a trust certificate with a 8% coupon on a $25 par value. The underlying security was a 8% trust preferred originating from Xerox Capital Trust I, and guaranteed by XRX as provided in the prospectus.  TP's are in effect junior bonds. 

The redemption was made at $25.3676 per certificate, a small premium to the $25 par value, plus accrued interest. Notice of Full Conditional Call on the Term Assets: CorTS Trust for Xerox Capital Trust I 

I owned 100 shares bought near par value.  I owned 50 of the 100 shares in a taxable account: 

The other 50 shares were held in the Roth IRA:

This redemption was by the issuer, rather than the owner of the call warrant.  I did not notice it, but XRX recently sold 1 billion of unsecured senior notes and the proceeds were going to be used to redeem the TP.  Xerox Closes on $1 Billion of Senior Unsecured Notes 

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