Terms

Series

Series B

Liquidation Preference

$25.00

Coupon Rate

5.5%

Rate Type

Fixed

Annual Dividend

$1.38

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

June 11, 2020

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Any Preferred Equity Expressly Made Senior To Series B Preferred Stock; Pari Passu With: Series D Preferred Stock (8.25% Cumulative Preferred Stock), Series E Preferred Stock (If And When Issued); Senior To: Common Stock, Any Other Class Or Series Of Preferred Equity Established After Original Issuance Date Not Expressly Made Senior Or Pari Passu As To Dividends

Regulatory (Basel III) Call

No

Tax Classification

Ordinary

Prospectus Summary

Braemar Hotels & Resorts Inc. (a REIT) is issuing up to $40 million of Series B Cumulative Convertible Preferred Stock with a 5.50% fixed annual dividend ($1.375 per share per annum) on a $25 liquidation preference per share. Dividends are paid quarterly on January 15, April 15, July 15, and October 15, with record dates on the preceding 30th calendar day of each month. The dividend is cumulative, meaning unpaid dividends accrue and must be satisfied in full before the common stock can receive any distributions. Notably, the dividend rate increases to 7.50% per annum if six or more quarterly dividend periods fall in arrears, creating a penalty mechanism to encourage timely payment. The Series B Preferred Stock ranks senior to common stock and subordinated to all existing and future debt (approximately $1.1 billion outstanding as of September 30, 2019). It ranks pari passu with the Series D Preferred Stock (8.25%) and the prospective Series E Preferred Stock. The dividend stopper provisions restrict all distributions on common stock and subordinated preferred securities unless all accumulated Series B dividends are paid or set aside; this blocker remains in effect so long as Series B dividends are in arrears, enforcing payment priority. The company operates as an externally-advised REIT through a holding company structure, which means the preferred shares are structurally senior only to the common equity. At the $25 par value, the Series B Preferred yields 5.50% annually ($1.375 per share). Dividends do not qualify for the preferential 15% long-term capital gains rate (QDI) because they are REIT distributions, and corporate holders do not receive the dividends-received deduction (DRD). Dividends are paid quarterly on fixed dates with a three-business-day settlement convention. The company may redeem the shares at $25 plus accrued dividends on or after June 11, 2020, with 30–60 days' notice; investors should note this call feature becomes valuable if interest rates decline, potentially forcing reinvestment at lower yields. Additionally, the convertibility feature introduces tax risk: adjustments to the conversion ratio in certain circumstances (stock splits, dividends, spin-offs) may trigger constructive dividend treatment and tax liability even without receipt of cash.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

No dividends on common stock or junior preferred stock may be declared, paid or set aside unless full cumulative dividends on Series B Preferred Stock have been paid or set apart for payment for all past periods; no junior or parity stock may be redeemed, purchased or acquired (with limited exceptions including REIT qualification maintenance). Additionally, existing and future indebtedness and any senior preferred equity may block dividend payments.

Other Preferreds from Braemar Hotel & Resorts Inc

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 31 (Weak)