Bank of America (BAC) has announced they will be selling a new non cumulative $25/share preferred stock issue.
The permanent ticker will be BAC-P on the NYSE after it completes a short stint on the OTC grey market under temporary ticker BOAPL (thanks Bob-in-DE)
The issue will be non-cumulative, qualified and investment grade.
The company has many other preferred stock issues outstanding which can be seen here.
They have a 6% issue (BAC-A) which is redeemable in April and I believe they will redeem this issue with proceeds. They had already announced the redemption of the 6.2% issue (BAC-C) for 1/29/2021.
The preliminary prospectus can be found here.
EarlyBird was early on this one.
Series “PP”
4.125% coupon. Noncumulative. Great deal for B of A.
Is this the one?
https://www.sec.gov/Archives/edgar/data/70858/000119312521013588/d112967dfwp.htm
– Dave
That’s it. The FWP was filed soon after market close.
What’s the yield? Schwab doesn’t say.
I left my BAC-Os out on the counter and a mouse carried them off and left me a five divy premium. Now it’s back down. These kind of issues are flip bait only now (short term, a few divs?, dump).
I am concerned about the perpetual bond attributes of preferreds and BBs without reset, float or term maturity. SOMEbody show me some respect! Will ya love me tomorrow? The rest is a kiss and a dream. Everyone here has a good understanding of the risk of these being in one’s portfolio for a long term.
I don’t think they should be held unless the knowledge/decision includes eventual dissolution of the security at a loss at some time or the end years of your personal annuity, with or without a beneficiary. (‘Til Death us do part) IE: a 30-50 year bond throwing off a steady coupon and then the next generation eventually receiving the par redemption like an Annuity Company with large and long actuarial expectation. LT Family planning WORKS and minimizes RISK. (Comment: As does Social Security and the Laws of Large Numbers: Actuarial Science).
Modern America has been trained to design portfolios bass-akwards. It’s a divide and conquer brokerage churn job. We even have the titling of assets within the confines of tax and estate law wrong also. I really do not expect the IRA to be around very much longer.
I have been involved in aspects of multi-generational estate planning and the American mindset does not readily accept this because of the Myth of Ego-Swagger. THAT is more FUN. It is a carefully placed brainwash and basically incorrect.
Institutions are using the rationale for the stampede to refi. which is reflecting the trend changes in debt yields and inflation…longer term….and is CORRECT. They are selling risk to the Monkeys. The Fed will run out of authority in the face of the global pressures. It may take awhile.
We are not assured of any outcome, except death, but your securities LIVE ON!
In the Spirit of Fun and Challenging Times! JA
Gee, I wonder whether or not it’s time for bond issuers to bring back a couple of blasts from the path – the death put and the sinking fund (sinking fund only for issues with maturities)…. These may be foreign terms for many of you youngest of youngn’s but they used to be available in bond covenants quite frequently… Given the continuing food fight among buyers for yield of any kind, it’s way too early for issuers to walk away from “covenant light” issues, but if inflation starts and the creep up in interest rates becomes real maybe we’ll see the return of these features .
https://www.investopedia.com/terms/d/deathput.asp
https://www.investopedia.com/terms/s/sinkingfund.asp
2WR, The “death put” good thought. I had my 94 year old mother laddered in brokered cd’s for that very reason, but unfortunately they are all getting called and no yield or availability on new cd’s. Maybe those moron’s in congress will bring back the BAB bonds and ad the death put feature would make sense, but I don’t expect anything that makes sense from that bunch. Oh by the way “Elvis” left the building. Sandhill cranes no longer here, weather has been so mild this winter they might be thinking might as well start back North and take are time?
Yeah, that CD thing….. I’m one who’s never fully invested and have always had a safety net of CDs that away from my investment accounts for added protection… I’m about to have a series of 2% cds mature and I’m not about to re-up in the .50% range so that only adds to the pressure of what to do what to do in the belt plus suspenders area.
Sandhills never made it here at all this year and have had dwindling appearances annually for the past three…
2WR – I am staying the course with my laddered CDs. I have one 2% maturing this month and another this spring. While the rates are certainly not attractive, I hold these as part of my safety net part of my plan – to fund the next 5 years of living expenses until I hit 65 so I do not have to worry about market fluctuations. I will just search around, probably open another online account at whatever bank is paying the most on a 1 year CD and bite the bullet and accept rates between .6% and .7% for the year.
Mav – My source for best CD rates right now seems to be Synchrony who’s offering .60% for 1 year….. However, they also pay .60% on high yield savings accnts and .50% on money market accounts… To me, I’ll take the gamble on where rates might be going in the nearterm future and not lock in on another CD vs having the flexibility of withdrawing from a savings account.. This all goes to the discussion on alternatives to brokers paying zippo for idle cash these days,but unless I need to fund some brilliant no risk idea in my investment accounts, ’tis the best I can do…. I’ve considered some of the esoteric ideas suggested here such as the U-Haul stuff, but never followed thru.
2WR – Thanks – Ally is one of the banks I have used and they too are at .6% right now on 1 year CDs. I have also though of keeping the funds in a high yield online money market earning about the same – but I am just not sure on the direction of those rates. So I have also been looking at other institutions rates and found these (I have not used any of these in the past but you can do all online)
Live Oak Bank is at .65%
There are some Credit Unions out there that have higher rates. Of course you need to meet their criteria for membership – but some offer easy ways to do so. The couple that I have seen with higher rates are:
Advancial .88% for certificates over $25K – alas they don’t have the easy membership option the ones below do
State Dept FCU – .80% – if you don’t meet any of their other criteria, just join the American Consumer Council for $8 (or $15 lifetime)
Superior Choice Credit Union – .80% for balances over $100K – if you don’t meet any of their other criteria, just join the American Consumer Council for $8 (or $15 lifetime)
Connexus Credit Union – .71% – if you don’t meet any of their other criteria, just make one time donation of $5 to Connexxus Foundation
Thanks, Mav – Though I understand the irony of saying this when I’m stuffing “what to do with it” money into a .60% savings account for now, I am not about to jump thru any hoops for the privilege of investing in an unknown credit union or the like that will at best only guarantee I’ll lose more than 1% per year to inflation….. Hopefully, my savings account money will eventually find its way into something better without the hoop jumping…. that’s why I continue to play called bonds. Picking up pennies for sure but 5¢ for every 1¢ sitting in savings or going into new CDs @.60%.
CD guys? this is not my broker but it would be similar, mine doesn’t even list any rates on my account page. Quess banks are flushed with money while the printing presses are still at full speed Powell, and Yellon what a combo? https://www.raymondjames.com/wealth-management/advice-products-and-services/investment-solutions/fixed-income/taxable-bonds/brokered-certificates-of-deposits-cds
Mike – yeah Fidelity offers brokered CDs as well – but the rates currently suck. I have always found I can do better directly. Fidelity does offer CDs on a secondary market – used to be I was able to find some deals there in the secondary market paying decent rates for my 88 year old mother, but those deals have dried up as of late
Yeah, I understand the hoops for an extra .1 or .2%
I myself am not worried about the credit union per se – they all provide federal insurance through the NCUA up to $250K
If they were not online applications that you can easily do, I probably wouldn’t consider it
Trading at just under 25. BAC-O at 25.38 has a better yld and YTC. As an individual investor why buy this? The big boys, to get enough shares, have no choice but to buy on issue but you don’t have to.
Not to mention BAC-L is about 5% and non callable.
Agree completely. It’s hard to see a reason to own this. I’m not even interested for a flip.
The ask on PPWLM was $160 today. You can get 4.375% for BBB+ and cumulative. I’d rather go that route if a gun was put to my head.
No choice? Not only did they have a choice they fought for allocations
total newb question … what kind of typical timeline between this kind of announcement and preliminary prospectus and knowing the blanks on dividends and such?
You will find something at EDGAR called a FWP sometime after market close same day or next morning at latest.
Here is an example from another issuer from 2 days ago.
https://www.sec.gov/Archives/edgar/data/72971/000119312521011605/0001193125-21-011605-index.htm