Customers Bancorp (CUBI) and Gabelli Go Anywhere Trust (GGO) have both announced this morning that they will be redeeming preferred shares in the near future.
CUBI has 4 issues of fixed to floating rate preferred outstanding–which can be seen here. 3 of the 4 issues are currently floating and have current floating coupons that are in the 5.25-5.50% area. CUBI will be calling the CUBI-C 7.00% issue as well as the CUBI-D 6.50% issue on 9/15/2021 ASSUMING their new $1,000 fixed to floating rate senior note offering is sold as expected. The new note offering prospectus can be read here.
The Gabelli Go Anywhere Trust (GGO) will redeem their 8% Puttable Preferred for $40.05/share on 9/27/2021. This issue had a current coupon of 5%. The press release is here.
Thanks to EarlyBird, J and mbg for being on top of the action.
15 thoughts on “Customers Bancorp and Gabelli Go Anywhere Trust to Redeem Preferreds”
GGO redemption is 40.005 per share, I think.
New CUBI issue should sell well. If their capital ratios will allow it I don’t know why CUBI would not redeem all 3 past call preferred issues. They are not very big. May know as soon as the FWP comes out.
I sold what I had first thing this morning. $25 and the last full divi is all you’re going to get.
I got 7 cents above last divi this afternoon plus 6 weeks to invest in something else. Either investors think there is going to be a delay or a possibility of a no go, I’m not sure which,
You know this Martin but for the possible benefit of others: CUBI has wanted to redeem these preferred for a long time. They can only be redeemed on a dividend payment date and the next such date is 9-15. Combine that with a 30-day notice requirement on a redemption the result is the call gets issued by 8-15. Would be surprised if it were otherwise.
Hot off the press, $100 mil @2.875%. C and D together are $75 mil. E is another $50 mil. Might still see redemption for all 3. If not then E is on an iron lung.
Priced the new issue at 2.875% for $100 million
They could still upsize couldn’t they? I’ll join the crowd – E’s a goner this time around too….. it’s higher rate then D as it is……
Gee, as if a 2.875% rate isn’t unattractive enough, SOFR has to move from .05% presently to .525% for the new issue to maintain its 2.875% coupon when it begins to float in 2026… Oh but wait! There’s more… In exchange for these great terms, if SOFR turns negative, it will be deemed to be zero for calculation purposes…. I feel so protected from interest rate changes. I’m so sorry I can’t sign up…
CUBI-C and CUBI-D are trading afew cents above redemption price plus dividend. Why? “Assuming their new note sells as expected”. Any reason to think it might not sell?
Any thoughts as to why Gabelli is redeeming a 5% preferred when they have higher coupon callable preferreds out there? Looks like it isn’t a refi transaction either.
They appear to be liquidating the fund, which is pretty small ($38 million total assets) as evidenced by a tender offer for all common shares.
LI – Back on May 20 Gabelli announced a right offering for GAB – https://www.sec.gov/Archives/edgar/data/794685/000138713121005866/gab-497ad_052021.htm At that time they said, “The proceeds may be used to redeem the Fund’s outstanding preferred stock.” GAB-G and H = 5% GAB-J = 5.45%.” They just completed that rights issue in July so it’s possible there’s more to come…
And with GAB-J trading at $26.80, it could become the latest victim of the “I didn’t think it would get called” syndrome.
Holding some GDV-G that may now be worth selling.
2WR, thanks for the heads up on GAB. How does one find out the size of the rights offering? That likely determines how many preferreds get called. I hope Gabelli isn’t getting out of the CEF preferreds business and switching to lower cost forms of financing.
LI – GAB raised $144 mil… https://finance.yahoo.com/news/gabelli-equity-trust-rights-offering-130000930.html
July 15, 2021
RYE, N.Y., July 15, 2021–(BUSINESS WIRE)–The Board of Directors of The Gabelli Equity Trust Inc. (NYSE:GAB) (the “Fund”) is pleased to announce the completion of its transferable rights offering (the “Offering” or “Offer”) in which more than 26.2 million common shares will be issued, resulting in gross proceeds to the Fund of approximately $144 million.
Pursuant to the Offer, the Fund issued one transferable right (a “Right”) for each common share of the Fund held by shareholders of record (“record date shareholders”) as of June 2, 2021. Holders of Rights were entitled to purchase common shares by submitting ten Rights and $5.50 for each share to be purchased (the subscription price). The Offer expired at 5:00 PM Eastern Time on July 14, 2021 and the Rights no longer trade on the New York Stock Exchange.
Preliminary results indicate that the Fund received total subscriptions of approximately $267 million (including over-subscription requests and notices of guaranteed delivery) for 185% of the 26,266,993 common shares available to be issued pursuant to the primary subscription. Approximately 64% of the shares to be issued were subscribed for in the primary subscription and the remaining shares were subscribed for pursuant to the over-subscription privilege.
The over-subscription requests exceeded the over-subscription shares available. As a result, the available over-subscription shares will be allocated pro rata among those fully exercising record date shareholders who over-subscribed based on the number of Rights originally issued to them by the Fund. The Fund will return to those investors that submitted over-subscription requests the full amount of their excess payments.
The new common shares will be issued on or about July 21, 2021.