The new fixed-rate reset preferred issue from Huntington Bancshares has been priced.
The fixed coupon on the issue is 6.875% which will remain effective until 4/14/2028 after which the coupon will reset at the 5 year treasury yield plus a fixed spread of 2.704%. The issue will be reset every 5 years there after.
They are selling 13 million shares–no overallotment.
This issue is split investment grade–Moody’s has it low investment grade.
Trading on the OTC market begins immediately.
The pricing term sheet is here.
$17 low
That coupon seems awfully high to me for a quality name like HBAN, given where interest rates are right now.
Anyone else agree or disagree?
Trading at Schwab
Schwab is charging a fee of $6.95 for it– as an OTC order.
New to the site – so bare with me. I see these as trading at about $25.10.
It just seems to me that with issues like the NLY series G and F out there and with 3 MO CDs paying 4.88% I would want to see these trade at about $23.50 for them to work.
Any other thoughts about valuation this issues and bank preferred more generally?
August–unless we see rates spike up this one won’t trade that low (might once he 10 year treasury gets back in the 4.3% area. NLY is a mREIT which always sell at a discount to most issues–this one is split investment grade and is perceived as a strong operator. I am not buying preferreds at this moment because of my strong belief that rates are going higher–so why bother when I bought 1 year CD’s last week at 5.15% (non callable).
By the way–welcome–glad to have you here.
Huntington has a webpage dedicated to their preferred issues.
https://ir.huntington.com/stock-data/preferred-equity
That’s nice Justin.