First Citizens Bancshares Prices Preferred Issue

North Carolina banker First Citizens Bancshares (FCNCA) has priced their new issue of non cumulative preferred stock.

The pricing is at 5.375%–higher than I anticipated. The issue is rated Baa3 (investment grade). Interestingly this issue has just a 1.30% underwriting discount which indicates to me that with the coupon the underwriters believe this will be an early sell.

Shares will trade immediately under OTC Grey market ticker FCIZP.

The pricing term sheet can be found here.

42 thoughts on “First Citizens Bancshares Prices Preferred Issue”

  1. RE: Vanguard and FCIZP

    Vanguard never acts with malice but they frequently fail to act.

    Like many here I got the memo a few weeks back about Vanguard prohibiting buys on the “lower” classes of OTC issues. One thing that was not clear was how they were going to treat new preferred issues on the grey market before they got to the NYSE. From such fly by night outfits as JP Morgan, State Street, Brookfield, AT&T, etc.

    Well, I got my answer this morning when my order for FCIZP was not taken. I did check on otcmarket to see the status of the issue, and sure enough it was in the dreaded “grey” category. I did not have the stomach to spend 20+ minutes on the phone to Valley Forge to attempt to change their minds, so I went about my day.

    Checking here later I saw that several posters had bought on Vanguard and sure enough, it is now buyable through the brokerage platform. No calls needed to the bond desk.

    Glad you figured it out, Vanguard, but maybe a trillion dollar firm could have in place a system that could figure such issues out faster?

    Just thinking.

    1. FCIZP was grey/institutional till ~1030 est. Then it got listed on pink sheets which makes a big difference.

      1. I am interested in how the status of FCIZP got changed, if anyone has any insight there.

        There are actually a whole bunch of issues that are miscategorized at OTCmarkets. Issues from the very same issuer, some labeled as Pink, some not.

        And there are whole bunch of issues that are Pink that Vanguard won’t trade, but should according to their own policy. But the time required to get corrections made is prohibitive for me.

  2. Put an order at 25.15, 1/2 position, several hours ago. Just executed. Should it get below par, I will double up.

  3. I bought some at Vanguard $25.1x. Needed to speak to a Bond trading desk and a 20 minutes of on-hold and try again but finally they ‘cleared’ whatever was not allowing trades or after a while dropping trades placed!

    That bond desk guy seemed to think this is not yet rated and could be Junk and certainly not Baa3 (and warned me about it)! Guess, I have more faith on info on this site so bought some…

  4. Well you Schwab guys owe me a Big Thank You. I was the one that raised hell all morning over this thing. Personally had their trader on the phone with my Pinnacle Rep as I raised some hell. They got it entered in their system “FINALLY” and I just got my order filled. Bought 13,000 shares at $25.18. Sometimes it pays to have all your money at one place. This was one of those times.

    1. Chuck, I have had to do what you did many times with pfd IPOs at Schwab. I don’t get upset about it. It’s just part of the process.

      Pfds are the Rodney Dangerfields of the investment world. For the past five years that I’ve been playing the preferred game, Schwab has told me that they are going to start paying more attention to pfds. I don’t see that it has happened.

      They still can’t manage to recognize a BB that ends in X or Z as a BB and not a mutual fund. And…. Global global investment department can’t implement a permanent fix for my Canadian preferreds with regard to the ticker. They list the Canadian ticker rather than the OTC so when I click on it nothing happens and then I have to keep a cheat sheet handy for the OTC tickers and access information on I’ve complained about this many times and they blame it on the vendor. It gets fixed but only for 24 to 48 hours and then it reverts back.

      1. On a good note, at least Schwab does have a global investment department. They have bought things for me that others have not been able to buy at their brokerage firms.

    2. outta my league Chuck! I did get it at $25.155 at eTrade but only 600 shares as I added 200 after an initial 400 order!

    3. It doesn’t really matter if it was entered in their system. The preferred wasn’t released to pink sheets till ~ 10:30 EST. Before that it was institutional otc only. So all of the posts here about it being inaccessible before that time was moot as it was a listing thing, not a brokerage issue.

  5. Called Fidelity bond desk and they said it traded OTC and then went back to the pink sheets. The guy said it should be available to trade on Monday.

    He seemed to be surprised that it was not on Quantumonline yet ;o)

    Good luck to everyone who is hunting this one.

  6. Picked up 400 shares at $25.17 at eTrade…let’s see what this does once the CV scare blows over. EDIT: looks like it executed at $25.155

  7. Got it at TDAmeritrade for 25.17 but that is ,y retirement account and I wanted it at Fidelity because of the qualified dividend.

    I wonder if the new trading rules will hurt the prices the underwriters can get on new offerings since fewer people can bid on them?

  8. A 5.375% coupon on an issue rated Baa3? In an environment where the 10-yr government bond yields less than 1%? This baby may top $27/shr before you can say “lickety-split”. Too bad I can’t get any…

  9. Fidelity is not allowing opening transactions on this.

    We will see if that changes once a few orders have gone through.

    I hate how brokerages think they have a right to tell everyone what they can buy.

    1. Seems like Fidelity is at the top of this list. Why not simply allow the account holder to indicate what they are willing to invest in.

      1. Whenever something patently stupid like this becomes a problem it is almost always because of lawyers.

    2. This is exactly why Fidelity doesn’t have all my business. I prefer to trade there except for this ridiculous position they have taken. TDA will allow opening trades on this.

    3. Fidelity is the worst. Some joker in the backroom, probably failed the bar exam, telling Mr. Ned Johnson, Founder and still the largest shareholders of this private biz, this issue is risky. Come on! This one is safer than Apple Computer these days. Wasted lots of time trying to talk to the new issue Fixed income twice. Nada1
      Vanguard brokerage is best. First I tested some small purchase just to make sure it is tradable. Then I sold some BC-B and APO-B. Picked up 400 shares around 2 p.m. EDT at $25.15. I got too much money tied up with shippers preferreds plus CLNY-G. Sold BC-B and some BC-C to get this SWAN. Try to get OPINI (Doug Le Du) @ $25.17 from my FIDO IRA account. Not sure that it can be filled. Perhaps, Fidelity may allow FCIZP tomorrow. Still got 8+ million shares for sale. OR just get PSB-Z with ex day coming up before the close of the day.

      1. My BC-C was also sold at Schwab. So, I placed another 200 shares at Schwab @ $25.15. Unbelievable drastic drawdown on eREIT. I suppose there is no SWAN even for solid “blue chip” eREIT, e.g. WPC, O, MWP (best of the healthcare eREIT). I suppose, there is no upside when people work at home and there is no need for any of these at least for now.

  10. Color me quite disgusted this morning at Schwab. I just spent 25 minutes with them and they have not set up even the grey market temporary symbol. By the time these ——s get around to it it will be well over $26+. Anybody out there having any luck in actually getting a “Filled Order” in the grey market????? It times like these that try mens souls!!!!!!!!

      1. On my Schwab account (Pinnacle Team) they are showing a price of $25.33 with thousands of shares trading hands. I think something like 243,000 shares. I hate when these companies do this to their customers. It will only be a few days and watch this thing go well over $26+.

  11. Crazy market. Just a few weeks ago, some other bank *called* a preferred with a coupon around there.

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