Finally Citizens Financial Group New Issue Details

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.

8 thoughts on “Finally Citizens Financial Group New Issue Details”

  1. 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!

    1. 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.

    2. 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.

      1. 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.

        1. 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.

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