IberiaBank Prices New Fixed-to-Floating Rate Preferred

IberiaBank (NASDAQ:IBKC) has priced their new fixed-to-floating rate preferred with an initial coupon of 6.10%.

The coupon will be fixed until 5/1/2024 after which it will float at a rate of 3 month Libor plus a spread of 3.859%.

The issue will pay semi-annual dividends until 5/1/2024 and once the issue reaches the floating rate period will pay dividends quarterly—the 1st dividend on the issue won’t be paid until 11/1/2019.

Dividends will be non-cumulative, but they should be qualified for preferential tax treatment.

The issue is rated BB by Standard and Poors and is unrated by the other ratings agencies.

The issue will trade immediately on the OTC Grey market under the temporary ticker symbol of IBBRL.

The permanent ticker once the issue moves onto NASDAQ will be IBKCN, but of course this can change if the exchange rejects the suggested ticker.

The pricing term sheet can be read here.

21 thoughts on “IberiaBank Prices New Fixed-to-Floating Rate Preferred”

  1. This would have to trade under $25 to equal the yield of the other issues that are already out from Iberia. There certainly doesn’t seem to be any reason to pay up for this one.

    1. Scott, the other 6.625% issue (IBKCP) from the same bank trades at about $26.6 giving a slightly higher current yield (around 6.22%) but when you look at yield to call the new issue looks slightly better.
      I bought a full position of the new issue at $25.11 today.

  2. FYI….Sunny

    Renaissance Capital to issue senior notes:

    Fitch Rates RenRe’s Senior Notes ‘A-‘
    BY Dow Jones & Company, Inc.
    — 11:32 AM ET 03/29/2019

    The following is a press release from Fitch Ratings:

    Fitch Ratings-Chicago-29 March 2019: Fitch Ratings has assigned an ‘A-‘ rating to the $400 million 3.6% senior unsecured notes due 2029 issued by RenaissanceRe Holdings Ltd. (RNR) . The new issuance ranks equally with RNR’s subsidiaries’ currently outstanding senior notes, which are fully and unconditionally guaranteed by RNR on a senior unsecured basis, and are thus rated equivalent. A full list of Fitch’s existing ratings on RNR and its subsidiaries, which were not affected by today’s action, follows at the end of this release.

  3. I bought some at $25.04 this morning. I’ve owned IBKCP since Dec. and very happy with it. I also have a bank account with Iberia and they seem like a good regional bank.

    1. I got some at $25.07. Not sure if it will run like MRBPP but I wouldn’t mind. Also got a bid in for NLY-G at $23.99, low rates should help them.

      1. schwab is saying “We are trying to get it added to our system now. Right now it is not available, the issue date is set for 4/4/2019, There seems to be GRAY market where it is at right now. It was priced but not issued yet, Most likely the transactions that have gone on are private transactions”

            1. Watch out, Schwab charged me a $50 “foreign transaction fee”. I guess they think Louisiana is a foreign country. Check your trade confirmations.

              1. Today I have Schwab telling me:
                “IBBRL is incorporated here in the US but is registered on the stock exchange as a global trading/foreign stock. So even though they are a US company (based in Louisiana) they have registered with the stock exchange as a foreign trading stock, so the $54.95 commission is correct for trading this position.”

                Needless to say, I’m skeptical about this. Has anyone been successful in having the charge removed?

                1. call them back. I just entered an order for IBKC which is the common stock at $60 per share to see how they handle the common stock. A $4.95 commission. You cannot handle common stock different than the preferred in my view.

                  I send in message, would love to see that answer in writing

                2. This afternoon, I noticed that schwab.com is no longer trying to charge the foreign transaction fee on IBBRL. A chat agent said she would refund what I was charged, but I don’t have a lot of confidence that this will be done automatically for other people’s previous trades. So, be sure to request a refund.

  4. Comparing to Citizens Financial earlier this year, which was rated a notch higher, the fixed is a bit light. I was fairly surprised when I looked at common stock during the financial crisis. Did well. So, maybe, depends on where it trades.

      1. SteveA–I hate the concept of only 2 dividend payments per year, but it doesn’t seem to have mattered from a share price perspective

        1. Tim – yes, looked at the price history of the other offerings. Pretty stable. Will see where it trades tomorrow. Pretty robust market demand right now. I passed on DUKEL and MRBPP for now. Too pricey for me.

          1. Agree Steve. If you want those issue you will likely be able to get in at a better price somewhere down the road. I was interested in those but not at the price they were at by the time I could actually place an order.

            But my judgment isn’t always the best.

            1. I also wanted to buy MRBPP but the asking price was manipulated. I had a bid in right at the start when there were no “askers” at $25.01 but it seemed to jump right over it. I went back and put another bid in at 25.50 and left it there, maybe one day it will hit. In this market I refuse to chase anything as any day we could get a major sale.

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