Hartford Financials Services Group (NYSE:HIG) has priced their new preferred offering with a coupon of 6%. While we haven’t drilled down into the financials this would seem a bit stingy for an issue that is marginally investment grade–in a rising rate environment.
The expected rating of this issue is Baa3 for Moodys and BBB- for Standard and Poors. Both of these ratings are just 1 notch above junk. Of course the issue is non-cumulative, but qualified for preferential tax treatment. It has the normal optional redemption starting in about 5 years.
Like all marginal coupon perpetual preferreds we have no interest, but also like all of them we will keep an eye on them, because we would have an interest with a current yield of 7% (we likely are delusional on this happening anytime soon).
For all who might be interested the shares should trade on the OTC Grey Market starting tomorrow under the temporary ticker HIGJL.