The final pricing term sheet for the new Citizens Financial Group (CFG) fixed to floating rate preferred issue has finally been posted.
The issue will trade with a fixed coupon of 6.35% until 4/5/2024 after which it will trade at a floating rate of 3 month Libor plus a spread of 3.642%.
There are 12 million shares being offered. The offer is rated BB+ by Standard and Poors and BB- by Fitch.
The final pricing term sheet can be seen here.
The issue, of course, is non-cumulative but is qualified for preferential tax treatment.
Shares are currently trading on the OTC Grey market and last changed hands at $25.20. The temporary ticker is CFGLL. The permanent ticker will be CFG-D when it moves to the NYSE.
We have bought a full position of the issue.
Tim,
Since you purchased it, I guess you liked the 3-month LIBOR plus 3.642%. if you don’t mind me asking, what’s your rule of thumb, if any, in terms of evaluating the floating provision? Do you compare the fixed rate vs. the current 3-month LIBOR plus 3.642% or do something else?
Thanks!
I will share mine. In today’s interest rate environment with Libor at 2.77%, a kicker of 3.642% means floating at 6.4%. When I can get floating rate protection at or near the fixed coupon, to me it is a buy.
Thanks SteveA
It’s priced right on the money, meaning the pre float rate is almost exactly equal to today’s LIBOR plus the spread. I prefer to see the float rate above the issue rate but definitely you don’t want a built in rate drop.
If you like the company, and like F2F, it’s a good buy.
Excellent. I will be buying also.
Like Tim, I went for a full share. $25.25 – which was opening and closing price today.
If this was released a few weeks ago, 6% preferreds were at $23 ish. Great timing for the company. Everyone is wanting to get back in the game, no matter the price.
As you know well, Mr. Lucky, its all timing… Some 6% par preferreds less than 6 months ago were trading over $26 dollars. BAC-B at 6% was issued past May and raced all the way to $26.74 last July and is now at $25.70. So they are creeping back up again.