$25.59
$29.60
bear $25.59
base $27.17
bull $29.60
margin of safety $21.50
market price* $25.37
This is the 8.50% Series A Cumulative Redeemable Perpetual Preference Share of Triton International, a Bermuda-based lessor of intermodal shipping containers. Each share has a $25.00 liquidation preference and pays $2.125 per year, and unpaid dividends accumulate. Triton's common shares were delisted when Brookfield Infrastructure completed its acquisition on September 28, 2023, so the preference shares are the only Triton securities still listed on the NYSE. The value of a preference share is a fixed stream of dividends plus the $25 that comes back if the company redeems it, so what matters is whether Triton can keep paying and how long the shares stay outstanding, not how fast the business grows. Ability to pay. In 2023 Triton generated $1,150 million of operating cash flow and $474 million of net income, and paid $52.1 million of dividends on all of its preference shares combined. Total revenue was $1,544 million in 2023, down from $1,680 million in 2022, and net income fell from $747 million to $474 million. Even after that decline, operating cash flow covered the preference dividends roughly 22 times. Debt is large, at $7.5 billion at the end of 2023 (down from $8.1 billion a year earlier), with $2.1 billion coming due in 2026 and $1.3 billion in 2027, and 89% of it fixed or hedged with interest rate swaps. Preference holders rank behind that debt, and Triton's filing warns that Brookfield's interests can differ from those of holders of its debt and preference shares. We treated the dividends as well covered given the cash flow above, but debt and Brookfield's control are the main risks to the shares. How the cases were built. The usual owner-earnings measure is built for common shares, and Triton no longer has publicly held common shares, so we did not build a per-common-share earnings history. The preference shares are valued directly on their contractual terms, discounted at 6% a year. - Bear case, $25.59: Triton redeems the shares at $25.00 one year from now (redemption has been at its option since March 15, 2024), after paying one more year of dividends. Refinancing a coupon of 8.50% is attractive because Triton issued a new 7.50% preference series in January 2026. We did not build a case where the $25 is not repaid, because nothing in the filings shows the dividend or the liquidation preference at risk given the coverage above. - Base case, $27.17: dividends continue for four years and the shares are then redeemed at $25.00. The shares have gone unredeemed for more than two years since they became redeemable, and the company's description of its preference shares as of December 31, 2025 still lists all 3,450,000 Series A shares as outstanding; four years is our judgement of a middle path and is not something Triton has disclosed. - Bull case, $29.60: dividends continue for ten years and the shares are then redeemed at $25.00. We do not assume the shares stay outstanding forever, because Triton holds the right to redeem them at any time. Anything beyond redemption at $25.00 is left out, because holders have no claim on Triton's growth. The 8.50% coupon is well above the 6% discount rate, which is why every case is worth more than the $25.00 face amount. The value depends on the shares not being redeemed soon, and the redemption timing is in Triton's hands. Geography. Container leasing revenue is booked by customer home region: in 2023 Europe was about $823 million, Asia about $529 million and the Americas about $133 million. What could make this wrong: a sharp fall in container lease rates or a refinancing problem with the 2026 and 2027 debt maturities that leads to a suspended dividend, or Brookfield choosing to redeem the shares even sooner than the one year in our bear case. The latest annual report in our data is for 2023; we have not seen full financial statements for 2024 or 2025. Margin-of-safety price: $21.50, about 16% below the bear case, because the value is capped by the redemption price and the margin allows a cushion against credit and timing risk. No business condition is needed beyond price.