Bank of America Selling New Preferred

Bank of America (NYSE:BAC) is coming to market with another preferred offering. Of course being a bank the dividends are non cumulative, but qualified.

The company had just offered a new preferred in June @ 5.375% (BAC-M) which as can be seen here has traded very strongly. Guess that tells us this new issue will have a lower coupon–for sure.

The issue will be low investment grade.

The new issue will have a permanent ticker of BAC-N when it hits the big board. The OTC Grey market ticker is not yet known.

The preliminary prospectus can be seen here.

Again mcg was right on this new issue 2 hours ago in Reader Alerts.

13 thoughts on “Bank of America Selling New Preferred”

      1. John A – this is the 2nd week in a row where we have order entering ability with official pricing being filed with the SEC. I have heard 5-5.125% on this one–hopefully the SEC filing will happen any minute now.

  1. Capital One COFOL is down to $24.82. I would guess the impact of C and BAC issuing preferreds at around the same rate.

    Bond prices are increasing the last week. Are we at a low? Are companies looking to flood the market as quickly as they can?

    1. If interest rates continue to creep up that’s bad news for these 5% preferreds and good news for other reasons. Kind of like a laddering strategy. I bought a little COFOL which I’ll either flip for a small profit or hold for more than the prevailing 2% interest.

      1. I wish we would see some panic buying in COFOL and NRZ-B. These things are flat lined or down. Didn’t they get the flipping for profit memo? Tim, can we redirect some of the targeted ad budget here to take care of this? I’ve not met my ends for this weeks steak dinner yet.

        1. Wish we could AFI–I am a negative few steak dinners this week–too many Gladstone issues which have been moving against me.

        2. I’ve noticed in the past that large issues with a lot of shares sold, such as COFOL with 60 million shares, that the last several million shares are often sold by the underwriters below par to “clear” their books. Once the issue gets to the exchange, it often trades better. COFOL should be going to the exchange any day now and get back to par at least … I hope anyway.

          This happened with BAC-M, which was a large issue, and I wouldn’t be surprised if it happens with their new issue announced today.

          1. I routinely count the number of shares traded for IPOs. After the underwriters are finished dumping their shares there’s often a bump in price. I won’t sell late in the dumping cycle.
            But I suspect COFOL is down simply because of the slight rise in interest rates. People won’t pay full price unless rates stay low.

    1. Thanks George–unfortunately you likely correct with the Capital One issue and the Citigroup each coming at 5%.

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