Dime Community Bancshares ‘Reopens’ Preferred Issue

New York community banker Dime Community Bancshares (DCOM) has ‘reopened’ a previous preferred issue.

The issue they are reopening is the 5.50% Non-cumulative preferred issue (DCOMP) sold in late January. Shares are rated BB- by Fitch.

It is not yet know how many new shares (likely around 1.2 million) will be sold, but the currently outstanding shares are trading lower by 3% ($21.22) on the news.

The reopening prospectus can be read here.

The bank has also released a new investor presentation.

Thanks to mcg for catching this.

15 thoughts on “Dime Community Bancshares ‘Reopens’ Preferred Issue”

  1. Seems to trading as low as $20.9x making it a 6.5% yielder if bought here.

    Given that it IPOed in mid-Feb at 5.5% coupon means it is not that ‘junky’ a bank. Buying some here and will add based on how it trades rest today and next day or two

  2. BB- at 5.50%. Why am I not excited? However, my TDAm screen shows DIV of $1.52/yr, which is almost 6.1%. (E*Trade says same thing.) At current price of $21.20, yield is 6.9%. Something seems off, or I’m reading something wrong… (I’m not normally bad at math!)

    1. I think the reported dividend is based on the initial stub period (times 4). The annual div should be $1.375.

      1. Don’t know if you’re saying the same thing, JDC, but the first coupon payment on 5/15 was a longer than 3 month payment since div started accruing from about Jan 29. Annual div will be 1.375 but those who collected the first divvy paid on 5/15 will have received about 1.52 in first year.

    2. If they just issued it and BB- then why is there such a discount? I saw today it fell by 70 cents. Not sure if I am missing something

      1. ‘reopened’ That’s a new one for me. What does it actually mean? Did they not sell all the shares originally offered? Or did they just decide to enlarge an existing issue. What’s to stop any company from doing this to any of their preferred issues at any time? Exposing my ignorance but I never heard of this before.

        1. no expert JV but these bank issued preferred’s are coming fast and furious. Rencet one I read they allowed a over allotment of 4,000,000 shares for up to 90 days for brokers. I would hve to read the prospectus on this one. Also could be bank is getting a handle on its losses last couple months and projecting forward its getting a added cushion in place.

        2. Jersey, this has happened before…UMH-D is a recent example…They “reopened” the issue this year and put more shares out to market at various times. This is done with bonds also. Many times Utilities will issue more of a previously issued bond with same yield and terms. However the pricing of additional offering has been issued either above or below par price based on the then current market conditions.

          1. Gridbird, that was relevant information. Is Dime pricing this offering below the market? or is it $25 which to me doesn’t make sense if it is being sold @21 unless there is more to it which my amateur eye is missing

              1. Interesting, 2WR, they must really need the cash. An official term pricing sheet, too and well below current price. These are definitely done different ways…UMH was just sending them out via the market…Dime was shoveling out below market price and well below “par”. Medical Transcription which has an 11% issue periodically reissues at $25 “Par” when the market price had them trading over $26. One guy on another forum would make good coin selling them at reissue notice, and them buying them back at $25 as they always quickly recovered.

            1. Jay, I dont know the details or specifics, but usually its “at the market” pricing. Sometimes the increase supply can keep a lid on pricing or even drop it near term. Typically I have seen this done more when issue is around par or slightly above. UMH-D was doing this when it was around $25 before crisis and had fortunate timing. I have zero insight about Dime or its reasons for doing this reopening.

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