Citigroup Announces New $1,000 Preferred Stock Offering

Citigroup is getting into the preferred stock issuance parade with the announcement of a new fixed to floating rate $1,000 preferred.

Not much is know as of yet, except we know it will be non-cumulative and qualified and will have a early redemption date in 2024.

The preliminary prospectus can be read here.

Could the company redeem outstanding issues? The outstanding issues are here.

REIT American Finance Trust Reopens Perpetual Preferred

Diversified REIT American Finance Trust (NASDAQ:AFIN) has announced a reopening of a previous perpetual preferred offering.

The company has reopened the 7.50% perpetual. They had previously sold 1.2 million shares and it trades under the ticker AFINP. Previous to the announcement of the reopening it was trading around $26, but fell to $25.10 at todays opening.

The company has not yet announced how many more shares they will be selling.

Info on the issue can be seen here.

Capital One Financial Announces New Preferred Offering

Capital One Financial Corporation (NYSE:COF) has announced an offering of new $25/share preferred stock.

Being a financial firm the offering will be non-cumulative, but qualified. Early redemption will start in 2024.

The permanent ticker symbol will be COF-I when it begins to trade on its permanent exchange. The issue will trade on the OTC grey market–likely tomorrow, but the temporary ticker has not been announced. We will post the ticker when announced.

The company has 6 other issues outstanding which can be seen here.

The preliminary prospectus can be read here.

Entergy Texas Preferred Opens Strong

As I expected the new 5.375% preferred from Entergy Texas (OTC:ETREP) opened strongly in the $25.25 area and is now trading around $25.50.

This is trading on eTrade, but I don’t see it even queued up yet at Fido.

I put in a small limit order at $25.50–if it doesn’t execute I will await the next opportunity–I am not going to chase it.

Allstate Announces Preferred Stock Redemptions

We all knew it was coming and it has happened with Allstate announcing the redemption of 6.625% issues ALL-D, ALL-E and 6.25% ALL-F.

When I say “we all knew it was coming” I am maybe speaking too broadly because the ALL-D 6.625% issue is trading at $26.76 and the ALL-F 6.25% issue is trading at $25.84. Maybe I am going crazy–but I fail to understand folks trading a security at $26.76 when it has reached the optional redemption period and the company had just sold an equivalent 5.10% issue. Do we have that many ‘rookies’ in the market now? Look at the trading in the ALL-D issue here. I wrote on 8/1 when the 5.10% issue was announced that “folks were asleep at the wheel” and from the chart you can see they woke up and sold the ALL-D issue hard—and then the buying started anew. Qeez.

The company’s announcement can be read here.

Entergy Texas Prices Preferred Issue

Entergy Texas (NYSE:ETR) has priced their new perpetual preferred stock.

The fixed rate coupon will be 5.375%. The issue is small (curiously small) at only 1.4 million shares. This small issue announcement makes me wonder if there is a typo–by a factor of 10.

The issues is rated Ba2 by Moodys and BBB- by Standard and Poors–barely investment grade.

The pricing term sheet is here.

As of moments ago the OTC temporary ticker had not yet been announced.

Entergy Texas Announces New Preferred Offering-Correction

Utility Entergy Texas (NYSE:ETR) has announced a new offering of cumulative preferred stock.

As usual detail are not known, but it will be a typical issue–quarterly payments, cumulative and qualified. This issue is NOT strong investment grade as I posted earlier–I looked at the bond rating instead of the preferred rating–in fact Moodys has it at Ba2 which is below investment grade.

Thanks to RetiredBroker for catching that error.

Preliminary details can be read here.

Eugene who almost always spots offerings first has mentioned the proceeds from the offering are to be used to call the EZT 5.625% baby bond, although this is not specifically mentioned in the prospectus. Shares of EZT, which became callable on 6/1/2019 have plunged from the $28.25 area to around $26.60 and can be seen here.

Tuesday Morning Kickoff

Equity markets were strong last week with the S&P500 moving in a range of 2853 to 2940 closing the week 2926—up almost 3%. The 10 year treasury moved in a range of 1.44% to 1.54% before closing the week at 1.51%.

This morning stocks are showing a loss as new tariffs kicked in on Chinese goods over the long weekend and there is a fear that higher prices will now flow through to the consumer.

The average $25/share preferred stock/baby bond moved 8 cents lower last week. The average current yield is 6.38%. There are 138 issues trading at $25/share or below which is 9 less than last week.

The Fed Balance Sheet, which is now supposed to be a neutral mode, fell by $5 billion last week. When added to the previous weeks $24 billion runoff it totals a $29 billion runoff in 2 weeks (note that we incorrectly stated last weeks runoff at $12 billion). Seems like the Fed is taking advantage of very strong bond markets to let the runoff continue–we will see if this continues or if it is just a short term adjusting period.

We had no new issues announced last week. The JMP Group (NYSE:JPM) baby bond issue announced 2 weeks ago has not priced–we will continue to watch for a pricing.

Late this week (Friday) we will have the employment number for August announced and this is a critical number as we look at the Fed meeting mid month—to cut or not to cut.