Regional giant banker Citizens Financial Group (CFG) has announced they will be selling a new fixed rate perpetual preferred.
The company has 2 other issues outstanding which can be seen here. NOTE the CFG-D fixed to floating issue will be called with the proceeds of this new offering.
The preliminary prospectus can be read here.
Thanks to J for picking this one up
Here is the FWP.
https://www.sec.gov/Archives/edgar/data/759944/000119312524140600/d64021dfwp.htm
I prefer the new MTB offering (a mixed investment grade versus a below investment grade by all the credit agencies) at 7.5%. Slightly higher coupon with a better investment grade rating. But, if it opens under $25, willing to buy a taste of it.
Although there are reasons to perhaps favor MTB due to the better coupon, MTB and CFG preferreds are rated identically by Moody’s and S&P Baa3/BB+. You have to sign in at both Moodys and S&P to verify.
https://www.sec.gov/Archives/edgar/data/36270/000119312524132472/d835782dfwp.htm
thanks
Have they announced whether they plan to call CFG D?
IYP,
Yes, they plan to redeem all of CFG-D.
https://www.sec.gov/Archives/edgar/data/759944/000119312524140085/d839895d424b2.htm#supprom839895_6
Bottom of page S-13:
USE OF PROCEEDS
We expect to receive net proceeds from this offering of approximately $ after expenses and the underwriting discount. We intend to use the net proceeds to redeem all outstanding shares of the Series D Preferred Stock and to use any remaining proceeds for general corporate purposes, which may include securities repurchase programs, dividend payments, capital expenditures, working capital, repayment or reduction of long-term and short-term debt, redemption of outstanding long-term debt, short-term debt and preferred equity securities, investing in, or extending credit to, our subsidiaries and the financing of acquisitions. We have not identified the amounts we will spend on any specific purpose after the redemption of the Series D Preferred Stock. Accordingly, we will retain broad discretion over the use of the net proceeds after the redemption of the Series D Preferred Stock.
Thank you. I should be happy about that seeing all the positions acquire at a discount. But I’m not….
Tried to just buy the new issue in the secondary (as a replacement) but there was some issue w the deal closing last night. Heard there was a cusip, but no temp symbol.
Next up SNV, FITB, and a slug of other floaters.
so CFG-D declared the quarterly dividend payable for July 8 at $.59 and change, and a record date of June 21st and can only redeem on a dividend payment date with a minimum of 30 and a maximum of 60 days notice.
So they will need to announce the call sometime in the next 3 weeks.
it last traded at 25.43, so there is still some guaranteed meat on the bone.
If you like ribs with very little meat on them, then CFG-D at 25.43 is for you… At 25.43 you’re not doing any better than a money market fund as the YTC = 5.15% approx… 0.594 = 9.50% annual coupon approx. So 25.43 bot on 5/20 on a $25 liquidation preference preferred due 7/6/24 = 5.155% yield to maturity (aka call date in this case). And technically speaking you don’t really get that because you’re paid on the 8th for dividend to the 6th since the 6th is a Saturday. I like buying called bonds to enhance money I’d usually have sitting in MMF. CFG-D doesn’t do that yet….. I think it may stay marginally high until there’s an actual announcement of call. I’ll continue to be a bidder lower……
2WR purchased some MTB PJ yesterday at 25.11 not as good as some people paid before it was trading on the market this past week. I think it’s a strong regional bank and at 7.5% it may not rise that much in this market with rates as high as they are, probably more downside in a market panic but then I might buy more.
Charles I got some MTB-J 7.5% yesterday as well 25.14 as much as it killed me to pay over par. I could see this getting a lot of attn from the pfd etfs, cefs etc. Not a fan of regional banks or their pfds but a taste is ok for me, put in the Roth. Bea
I had the same reaction. But so far, the market seems willing to accept a lower yield from CFG, which is the smaller bank. And that’s with the new CFG preferred trading on the bulletin board while MTB is now on the NYSE.
MTB-H yields under 6% and is non-cumulative. What’s to like?
Joe, I think the reference is to MTB-J which was recently issued at 7.5% and is trading around $25.30 ish now.
Final pricing 16 million shares ($400 mil) 7.375 coupon (not a floater!) & QDI
How did you find the coupon rate? It is not in the prospectus. I have a small amount of the CFG-D floating preferred. That just started the floating rate–9.3% at present! Happy camper with that! However getting a fairly solid large regional bank preferred at 7% qualified tax rate locked in (before call) for 5 years sounds OK to me if the CFG-D is called. Comments?
😋
Sign me up..
I’m not seeing it, what’s the price talk
Hi, do we get the float rate dividend when redeemed or the old rate ? Thx.
I think I answered my own question, starts floating 4/15. Thx.