Big Time Ouch from Popular

In what has to be one of the largest knocks preferred investors have taken on a call in recent memory Popular Inc. (BPOP) has announced the redemption of their 6.70% Trust preferred issue (BPOPN). The call is for 11/1/2021.

Shares had traded just shy of $29/share yesterday and are now trading at $25.22.

Thanks to Fred for being on this early with Ken chiming in with this press release.

Investors need to be careful with the various Puerto Rican bank issues as these company’s have improved their financials greatly in the last 10 years and it is likely any high coupons are going to be called.

11 thoughts on “Big Time Ouch from Popular”

  1. So it’s been callable since 2008? That’s my definition of ‘bonus time’. One got 13 years past call date. If you had it all that time that’s like 21k of interest on a thousand shares.. Sure you just list 4000 put if you’d been in it to win it then you’re doing OK.

    Besides who wouldn’t of sold out at that neg ytc?

  2. Tim—-I bought 7.4% fbprm about 6 months ago at $25.33. I plan to hold indefinitely. If it gets called, so be it. There is a higher coupon which is why I bought this one.

  3. I can’t believe FBPRO traded at $28.50 this morning

    FBP mentioned the possibility of redeeming some preferred stocks earlier this year and this one has the highest coupon

    1. Fred–I”ve checked them out financially and they should call some–they can. On the other hand I bought some of the 7% FBPRL issue a while back and feel real good holding it–tried to buy more down around $25, but no liquidity in these issues. I probably should not over stay my welcome.

      1. Tim—-I bought 7.4% fbprm about 6 months ago at $25.33. I plan to hold indefinitely. If it gets called, so be it. There is a higher coupon which is why I bought this one.

  4. One of my favorite things about this site is that the people on here actually read the documents underlying these securities and can do the math.

    1. Yes SteveH–there is always someone rooting around in SEC documents and press releases.

    2. As a general rule I couldn’t be \bothered with reading the docs, but appreciate those who do!!

      I can’t believe I never screened out BPOPN?? I use to send much $$$ to fdic insured PR banks and most ended in bankruptcy. Nice the 2 big ones have survived. Was concerned when SAN bought banking interest in PR a few years back…..

  5. Definitely not how “efficient” markets are suppose to work. Was a large issue – 12 million shares. But the monthly dividend must have sucked investors in to holding this thing nearly $4 above par value when it was callable anytime.

    Can’t imagine anyone who follows this site still owned this security, but of course formulaic/index-following preferred ETF PFF did have 350,000+ shares.

    1. Rob–certainly the etf’s hold them, but I know that some folks who have no idea what they are doing buy these things not understanding the optional redemption. Oh well a spendy lessons for anyone buying up here.

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