Charles Schwab Corp to Sell New Preferred

Charles Schwab (SCHW) has just announced they will be selling a new preferred offering. While the company doesn’t list the redemption of the SCHW-C as a ‘use of proceeds’ I think there is a high likelihood they will call this 6% issue as it became redeemable on 12/1.

The company already has a couple issues outstanding which can be seen here.

The preliminary prospectus can be found here.

The issue will be investment grade, non-cumulative and qualified.

Yield talk is in the 4.375% area per Chuck P from his Schwab rep.

Chuck P was on this one early.

9 thoughts on “Charles Schwab Corp to Sell New Preferred”

  1. Pushes off 10 Treasury + , not yet disclosed. Do I understand that you have to call Schwab to buy this?

    1. I just called I was told the initial fixed rate was 4.0% and the spread off the 10 year is only 3.1%. Yikes!

  2. Aside from the issue, but as a Schwab account holder, I’m concerned about the distinct possibility of major glitches in the TDI takeover.

  3. I tried to get in on this Schwab preferred thru my TDA account since I thought that I may get priority treatment since TDA and Schwab are together. The agent at TDA explained that this is going to be a $1000 per share bond. With fixed rate for first 10 years and then it would adjust the rate every 10 years. He said initial rate would be around 4.375%. I never bought a preferred with $1000 par…so I passed on this.

    1. RAB–if it not exchange traded I have no interest myself–just like the liquidity.

      1. By my reading of prospectus supplement, SCHW-C can only be called on div pay dates. At current price of $25.32, my yield to call (3/1/21) is 0.95%. Not great but little risk, better than some money markets, and yield sky rockets to 3.58% if not called until June 1. I’m storing a little dry powder here.

        JDC

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