As predicated by some the new $25 perpetual preferred issue from insurer Enstar Group (NASDAQ:ESGR) has priced with a coupon of 7%.
The issue is non cumulative and of course pays quarterly dividends with the 1st dividend to be paid on 3/1/2019.
The company will sell 4.4 million shares with another 660,000 available for overallotments.
Starting tomorrow the shares should trade under the temporary ticker of ESGRL on the OTC Grey Market. This means that it may be Friday before some investors see it listed on their particular broker website (some brokers are faster than others). Potential buyers will likely get as good a price on Friday as they will tomorrow as 5.06 million shares do take some time to sell.
Shares will trade on the NASDAQ under the permanent ticker of ESGRO.
The pricing term sheet can be read here.
The issue is rated BB+ by S&P and BB+ by Fitch–both of these are 1 notch below investment grade.
Thanks to George for keeping us on our toes.
Fidelity is showing a $50 “Estimated Foreign Settlement Fee” with this?
not sure but it is a Bermuda based insurance company
Seems like they always try to ‘extract’ that fee. I never have this issue with eTrade.
Should be interesting to see what happens to the price of ESGRP as a result of this offering.
Unless I am reading it wrong, both pay the same coupon but ESGRP floats after 10 years versus 7% fixed. Will be interesting to see how they both trade
When Spark Energy did this, their preferreds tanked and still hasn’t recovered.
ESGRL at 24.65 as of 10am
ESGRP at 25.25
To buy or not to buy. That is the question.
I have an interest in this issue but at what price ? I can live with 7% but…. This is a large issue and I’m hoping the sheer number of shares available might drive the price down a little more. I’ve got a bid for 300 shares in at 24.50.