AT&T to Sell New Preferred

AT&T (T) has announced the coming issuance of a new series of fixed rate preferred stock. The company is also selling a fixed rate reset euro preferred.

This will trade under the permanent ticker of T-C when it finally hits the big board for trading. The issue will trade on the OTC Grey market prior to the big board, but the ticker has not yet been announced.

The company currently has a 5% perpetual outstanding which can be seen here. This issue trades very strong at $26.40.

The preliminary prospectus can be read here.

EarlyBird is hearing yield talk in the 4.875-5% area.

Ptrader and EarlyBird were on this new issue right away.

25 thoughts on “AT&T to Sell New Preferred”

  1. OMG….I flipped the last one so quick it even shocked me….gonna have to find money to flip this

    1. Xwords59, A core hold for me. Loaded up around 27 and baring any major events will let it just sit and pay forever. Not PPLWM, but a Camroc-esqe hold nevertheless. AT&T is not going anywhere anytime soon.

        1. Davo, its an old Utah Light and Power preferred issued noncallable. PacifiCorp bought them out years ago and had to assume it. So its PacifiCorp’s (part of Warren Buffett’s energy division) responsibility. A very small old illiquid float with a high current ask of over $170 a share.

            1. I was just making sure he knew what was going on though, Camroc. I get uneasy with Davo fully understanding what it is when he is referencing an incorrect utility from opposite side of US….. I am barely clinging to my plus 6% ave yield, but I now have five, 4% range issues myself and a couple on the edge. But, Im really not trying to dissuade him from buying your shares you are trolling at $174. 😄

              1. Actually, I looked real hard at buying some of those just to round out an odd lot, but just couldn’t pull the trigger. So I bought a callable yielding about 20 basis points more.

                Hard times for us investors in illiquids. Too much uncertainty and fright. Risk is definitely off when you can’t even go out for a burger without putting your life on the line.


                1. Quality preferreds have been big winners this year. But largely that has been my personal experience 8 years running.

    2. An old favorite. I finished selling off at 30.81. Haven’t bought back in yet. Spreads aren’t as big as they once were.

      1. Martin G, I flipped a few times though started buying as a hedge against resets and ftfs. Been sitting on a full allocation for a while and in the current environment sitting on my hands with this issue.

        Still rolling the AGNCM/AGNCN arb back and forth. Arbing the total $$ (not share count) so picking up a few shares each swap.

        1. AGNCM has been overpriced I bought the new one instead hoping we can add AGNCP to the arb mixing bowl. Lately I’ve just been in and out of AGNCO on 10-15 point swings. and a little AGNCN.

          I’ve had some bids on KTBA that went nowhere. I’m too cheap to pay over $30 for it.

  2. The outstanding issue is coming down and it might give a nice entry point. We are below $26, I’m waiting for another couple percentage points lower but I doubt it will get there.

  3. We are talking about below investment grade. However, I do agree with many posters, 4.75% would not surprise me. For JUNK status and that is truly scary. AATRL and IDLDP at 5.1% were true bargains in Jan/Feb of this year.

  4. The 5% preferred acts as a good hedge if you own the stock. While the stock dividend is high due to share price there has to be some concern about share price falling because the company’s HBO streaming service is going to have a lot of competition — all priced much lower. We know the Direct TV acquisition was a bust and continues to shed subscribers. I own the 5% preferred and some of the stock, both for the long haul and see value in both. (But i’m not buying preferred below 5%!)

    1. Franklin – I too have the same strategy – owning both T and T.PRA and celebrating every three months. And sometimes writing sort term calls on T.

      I wish I had bought more T.PRA under $25. Will probably pickup this new offering.

  5. At the moment the common stock has a 5.45% dividend. Also the dividend typically increases yearly. If they can continue to pay down debt and buy back stock I’m content with the common stock. Not interested in there perpetual at below 5%.

  6. if this trades at 4.75 and can get it at 25 or less I would buy it. I would rather own the preferred over the shares at 38+ – I bought in on T at 29 and sold at 34 after a few dividends and its gone to crazy to chase.

    I would get 100 shares at a 5% yield for sure

  7. I’ll take a wild guess at 4.65%. Like I’ve said before as long as people keep chasing these low yielders companies will keep issuing them. We are also seeing many names that I’ve never even heard of. Just shows you how desperate the public has become for anything with a yield. Usually these things don’t end well. No I don’t know when but its inevitable. I do like the AT&T but again probably won’t buy it due to the very low coupon it will most likely be.

  8. With the 5% issue trading so high I’d be surprised if this is anywhere near 5%. seems like it should be 4.7% or so.

  9. 5% would be an insanely good coupon based on where their other 5% trades. I’m guessing more likr 4.75.

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