Convertible Preferred Stock

Public Storage Inc. will call for redemption of all of its outstanding shares of 8.25% convertible preferred stock on July 1. Dividends on the stock will stop accruing on June 30. Glendale-based Public Storage, the nation's largest self-storage firm, will redeem all outstanding shares at the price of 1.6835 shares of common stock for each share of 8.25% convertible preferred stock. Cash will be paid in lieu of fractional shares of common stock.

NeoTherapeutics Inc., an Irvine biopharmaceutical company, said Monday it has raised $5 million by selling preferred stock that can be converted into a 10% stake in its genomic research unit, NeoGene Technologies Inc. The company said in a news release that it will use proceeds of the sale, a private placement, to expand research at NeoGene. It did not identify the institutional investors that bought the stock.

ESAT Inc. said Wednesday that it has entered into an agreement with a third-party investor for the immediate purchase of $5 million of convertible preferred stock and the establishment of a $20-million equity line of credit. The Fountain Valley provider of satellite-based information delivery systems did not identify the investor.

Ford Boosts Dividend: The auto maker raised its dividend to 26 cents a share on Class B and common stock. The dividends are payable Dec. 1 to stockholders of record on Nov. 1. The dividend reflects a 2-for-1 stock split. A dividend of $1.05 a share on depositary shares representing Ford Motor Co.'s Series A cumulative convertible preferred stock, and a dividend of 51.5625 cents a share on depositary shares representing the company's Series B cumulative preferred stock, were also declared.

ESAT Inc. said Wednesday that it has entered into an agreement with a third-party investor for the immediate purchase of $5 million of convertible preferred stock and the establishment of a $20-million equity line of credit. The Fountain Valley provider of satellite-based information delivery systems did not identify the investor.

Public Storage Inc. will call for redemption of all of its outstanding shares of 8.25% convertible preferred stock on July 1. Dividends on the stock will stop accruing on June 30. Glendale-based Public Storage, the nation's largest self-storage firm, will redeem all outstanding shares at the price of 1.6835 shares of common stock for each share of 8.25% convertible preferred stock. Cash will be paid in lieu of fractional shares of common stock.

"Poison preferred" and "death-spiral convertible" sound more like the latest blockbuster movie titles than nicknames for financing tools used by small companies. But these financings, a type of derivative with a value pegged to--and potentially ruinous for--a company's common stock, are being blamed for the share price woes of an increasing number of businesses, including Southern California-based Koo Koo Roo Inc. and Techniclone Corp.

As stocks drive toward unexplored territory along the road toward Dow 7,000, it might be time to take the top down and try a preferred convertible. That's not a car for hotshot securities analysts but a kind of stock that can provide your portfolio with a lot of the zoom of a raging bull market but protect it from crashing in a correction. Convertible preferred stocks are hybrid securities invented to give companies and investors a middle ground between bonds and stocks.

Ford Boosts Dividend: The auto maker raised its dividend to 26 cents a share on Class B and common stock. The dividends are payable Dec. 1 to stockholders of record on Nov. 1. The dividend reflects a 2-for-1 stock split. A dividend of $1.05 a share on depositary shares representing Ford Motor Co.'s Series A cumulative convertible preferred stock, and a dividend of 51.5625 cents a share on depositary shares representing the company's Series B cumulative preferred stock, were also declared.

Com Systems, a Van Nuys-based long-distance telecommunications operator, said it sold 4.5 million shares of its Series C cumulative convertible preferred stock for $9 million, and $13 million of its five-year, 11.5% convertible subordinated debentures to OmniCorp International B.V. The preferred stock is convertible into 4.5 million shares of Com Systems common stock, and the debentures are convertible into 2.9 million shares of common stock.