Capital One Financial Finally Files Pricing Document

Finally COF pricing has been filed with the SEC, and unfortunately it is as bad as we all believed it would be–5%. Any number of readers had most of this data prior to the filing hitting the SEC–but just the same here it is. We have no interest whatsoever in this one.

The pricing term sheet is here.

26 thoughts on “Capital One Financial Finally Files Pricing Document”

  1. Whenever I see an issue like this I just go look at European rates for a few minutes. Makes this issue look like a warm bowl of gravy.

  2. 5% for a BB+ preferred? What are people thinking? You can easily do better than that. WFC-L is just one of those options.

    1. Landlord–unfortunately you are looking at the future–at least for a few months—and yes there are certainly better options given the junky rating on this issue.

    2. That’s not what is amazing. What is amazing is that Europeans aren’t flooding the market to buy both those and driving the yield down even more.

      Where are they putting their money, and more to the point, why are they putting it there?

      1. Because of the dollars’s strength, that 5% coupon doesn’t look so hot when you have a 4% loss converting it back to Euros. They will definitely jump in if the dollar weakens to 1.10 or higher.

  3. Uh, no. Just bought more WFC-L. And a bit more BAC-L, too, now that it’s yielding over 5% again.

    Call ’em if you can…

    JMO

    1. Camroc – I know there must be a rationale – why are WFC-L and BAC-L immune to possible call???

      1. Because they are convertible preferreds, not traditional preferreds. Strike price is way above current prices. Not unusual…Same ilk essentially as RPT-D, LXP-C, and NYCB-U.

        1. Since I sold some CNLPL & CNTHP, I need another home for the proceeds. May consider adding to BAC-L & WFC-L, but they’re so darn high priced!

          1. Well, inspy, if you’re feeling lucky, callwise, I can let you have some AILLL. Just bid 28 on however many you want. 🙂

            FWIW, Grid doesn’t think they’ll be called and you know they’ve never called AILNP, so there’s that, too. 🙂 again…

          2. We are all being forced to gamble. This is irresponsible policy in house of cards (paper) where debt piles are reliant on other debt piles or some debt gorge at lower rates. I sold SRA and bot the new COFOL today and as I stated earlier now am reliant on sh term cap gains instead of prudent income investing. No on is being served in fact except a reinforcement of financial engineering as a truth…well it is has ameliorative effect like treating an ephesimic smoker with an inhaler.
            I am no economist, but negative rates are a transfer of dumb money (savers) to “those who put it to work and know what to do with it” (risk capitalists). I have been forced to lend to the private marketeers, on their terms. That’s the Religion, that’s why they got bailed out. Negative rates also seem to be forced inflation or loss of principal value.
            I have the option to just pay off my last investment property mortgage which is already low rate, the only call on it is when I decide to sell? But what quality and demand is going to be the tenant? Equity? Options? Hedging?
            No matter how I have turned this in space and time there are going to be problems and natural causative corrections…when? There are no smartest guys in the room anymore. I’m back to Kansas.

            1. Joel, you must first come inside the circle to see the vison and find enlightenment. First “what’s in you wallet?” gives people credit cards. People buy all kinds of junk they cannot afford with the credit cards. Then “what’s in your wallet?” sells the CLOs to investors. Then people have so much junk it won’t fit in their garage. Then PSA sells IPO to build storage units for people with too much junk to fit in their garage. In this way the circle of wealth is completed and investors prosper. Neeeeh….never mind.

        2. Thanks so much. I am having trouble finding RPT-D. And by the way, if you can give me a good source for busted convertibles, I won’t have to bother you again.

          Appreciate all your wisdom on this site.

          1. Ben, what do you mean by having trouble finding it? Info about it? The company? Or a proper ticker that is accepted by your brokerage?
            I disdainfully own this thing myself.

      2. 2wr, I will confess affection for the phrase “busted convertible”. Makes it sound like we’re winning.

    1. A4I, Its all relative….I would consider this even more depressing, lol..

      Union Electric Co., $3.50 Series Cumul Preferred Stock
      Ticker Symbol: UEPEN CUSIP: 906548201 Exchange: OTOTC

      Niagara Mohawk Power Corp., 3.40% Series Preferred Stock
      Ticker Symbol: NMPWP CUSIP: 653522201 Exchange: OTOTC
      Security Type: Traditional Preferred Stock

      Wisconsin Electric Power Co., 3.60% Serial Preferred Stock
      Ticker Symbol: WELPP CUSIP: 976656306 Exchange: OTOTC
      Security Type: Traditional Preferred Stock

      1. You’re not helping me out here, Grid. The tears are still accumulating in my soup… What a tough year for redemptions of high yielders (which now means anything with a 6 handle or higher!) KTBA, CPE-A, the BAC issues, old Merrill issues, all of the illiquids now considered ‘penny stocks’ and frozen from trading by jackbags like Merrill, tons of bank pfd’s, REIT preferred’s, etc.
        Uggh, just simply uggh. So we either play the game or get played by the game. Back to soldiering on…

        1. A4I, yes, I laid down and let the bully kick sand in my face, by paying $118 for PPWLO and buying UEPEP at $101.40 (but that was more a souvenir purchase, lol). And also buying things I used to laugh at like LXP-C (but I recently flipped it as I got almost $3 a share plus a divi) NYCB-U (still own it), and AATRL (sold it to as it jumped a couple bucks quickly).
          But I am not taking it anymore and any fixed 5% or sub for now anyways can kiss my rear. I am fighting back the way I always have when this happened last time in 2016….
          But admittedly the game has been buy new issues if you can get them and then flip. It will work until it wont. I havent done much there unfortunately. I was too prissy with my price point on Entergy Texas and blew it. But…history will repeat itself. They will keep lowering the yield on IPOs until someone gets caught holding the bag. If interest rates go lower then of course they will look like great long holds.

          1. Grid, I bet you couldn’t sit still for long as a child either. I wonder how many notes were sent home to your mom by all the teachers you frazzled. lol

            Well, I can sit very still in my little quiet corner except when I occasionally reach out to snipe something I think will always pay me and never be called away.

            Actually, I hope to get to a point where all my callables are gone and I never have to trade at all except to reinvest what I don’t need to sustain my fairly spartan lifestyle. Even if it’s only to buy some of those 3+%ers you listed earlier–which, btw, could easily come to pass, given the way we seem to be headed these uncertain days.

            PSA probably wouldn’t like me very much because, other than fine wine, I don’t spend much at all. Someone on another site posted the following and it really rang a bell with me:

            “Money can’t buy anything worth a damn except freedom.”

            Good luck to all…

            JMO

            1. Camroc, Well I dont think we have worry about being paid with our PacifiCorps…Profit coverage ratio is in the thousands… Morwa likes to hawk issues with 2 times coverage and thinks its safe, lol. But I know really why you like it…Its totally old school. Predominantly powered by coal, and they own coal mines that deliver it right to the plant. And Buffett owning it is just a cherry on the cake, lol.
              Those 3% ers are all still under par for now, thankfully. In all seriousness I dont know what to think. I have my bets hedged. Some fixed, some resets, some fixed floor resets, some uncallables, some past call anchored, etc. They all kind of wobble in different directions at times.

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