Huntington Bancshares (HBAN) has announced the redemption of the HBANN 5.875% perpetual preferred issue. This issue originally was a First Merit issue which was acquired by HBAN. The redemption is for 10/15/2021.
Markets are sleeping–the issue is trading at $25.87—50 cents above value (redemption is at $25.37).
J was on top of this and posted in the Reader Alerts section
What about the dividend announced on 16 Sep (ex-div)?
https://www.sec.gov/Archives/edgar/data/49196/000004919621000065/hban-2021x07x21xex991.htm
The common stock cash dividend is payable October 1, 2021, to shareholders of record on September 17, 2021
All six preferred stock cash dividends are payable October 15, 2021, to their respective shareholders of record on October 1, 2021
I don’t short stocks, but my understanding is if you hold the short position through the record date you will owe the dividend. Is that correct?.
If so, then there isn’t a lot of meat left on the bone now with margin fees and the dividend to be paid since it was down to $25.48 just a minute ago.
If you are short the stock on the ex-dividend date then you must pay it to the lender. The higher the borrow rate and the longer the short position is open, the less the amount of meat left on the bone.
FWIW, the lender of the shares receives the dividend as Payment-In-Lieu cash rather than as a dividend, affecting the tax rate.