Keycorp to Sell New Preferred

Banking company Keycorp (NYSE:KEY) will be selling a new fixed rate preferred issue. Of course being a banking company the new issue will be non-cumulative.  The new ticker is KEY-J.  The OTC Grey Market ticker will be KYYCP.

Details of the new issue have not yet been announced.

The company has a fixed-to-floating rate issue outstanding right now that has a coupon of 6.125% and is not redeemable until 2026. These shares are trading very strongly in the $26.88 area.

The banking preferred list can be found here.

The older Keycorp issue (NYSE:KEY-I) can be found here.

The preliminary prospectus can be found here for the new issue

14 thoughts on “Keycorp to Sell New Preferred”

  1. Two relevant quotes from the last MTB conf call:

    “As to capital, as I noted at the start of the call, we expect to begin executing the 2018 capital plan. Our estimated 10.52% CET1 ratio at the end of the quarter is still in excess of where we believe is necessary to safely operate the bank over the long-term there is room to continue to bring that ratio down.”

    They have capital headroom to redeem the preferreds, and

    “The plan also calls for $1.8 billion of common stock repurchases to be completed over the fourth quarter period that began July 1st. The board’s stock repurchase authorization record [to implement the buyback plan was announced by means of an 8-K filing yesterday.”

    Hard to imagine they max out the buyback without redeeming the preferreds.

    1. Qniform, yes I am treating it as a very short duration issue that has some meat on the bone and extremely safe. That fact its an older grandfathered cummulative QDI preferred which just doesnt flat out doesnt exist anymore (except illiquid FIISO which I own) is reason enough to call. Plus its high quality 6.375% par yield could be reissued sub 6% if rates dont get away from them come call date.

  2. Just to alert anyone here; I’m hoping no one here has preferreds GST.A or GST.B they are getting torched today! Wishing you profitable investing, Nomad

    1. I dont own issues like that one, Nomad. I wish I could find more issues like BANFP. Bought last week and sold today a dollar higher than I bought them. Love those goofy trading illiquids! Used proceeds to buy more of my 2 biggest holdings NSS and MTB-.

      1. Grid, I remember that Norman Roberts use to write about GST and their preferrers, so I thoughts I’d alert this board. I would NEVER invest in anything so speculative and hope that no one here drank the KoolAid on this toxic trouble.
        Like you, I am long MTB.C and believe there is a good chance it will be called at or near Mid-November. Wishing you profitable investing, Nomad

        1. Yes, Nomad, I know you dont stray too far from the sandbox I play in, lol…I shifted over to MTB- from MTB-C even though they are identical sister issues. MTB- has had more liquidity recently for some odd reason so I have played around in it more lately. I am considering this a “fake news” term dated issue. But if it lives on past its first call date, I will be more than pleased and hold on.

          1. Grid, the preferred MTB. has around $230 MM outstanding and MTB.C about $152 MM and I saw the nice “liquid” issue trade a bit more (very hard to buy this because a round lot is over $100K). I too am hoping that M&T Bank just leaves these alone and I get to hand these off someday to my estate. Did you dabble in the recent IPO ETP.D?

        2. Nomad, Interesting that MTB- actually Is a bigger issue. I never really checked, but assumed it smaller because it seemed like C shares leaked out a bit easier quite a bit of the time. I didnt buy any ETP-D. I simply just dont want any K- 1 papers as the tax stuff in IRA starting to worry me. I will keep my DCP preferred though.

      1. The new one is still rated IG by Moody with SP BB. Coupon is 5.65% though.
        I can’t find the KEY-I in QOL. But the H was rated BB+.
        The new one has no floating feature after 5 years. Perhaps reasonably priced if it would go below par. The new BAC is a better deal and the early BAC at 6% was obviously a no brainer IMHO. Wished I bought more instead of chasing energy ones.

  3. Promising for me since I look for investment grade preferred issues (conservative purchases except for 10% portfolio). The moodys rating for KEY-I was Baa3 and SP rating was BB+. At 6%, I’m in.

    1. Maybe not so promising and 6% not enough. From the preliminary filing

      “Standard & Poor’s and Fitch are expected to rate the Series F Preferred Stock below investment grade. A downgrade, withdrawal, or the announcement of a possible downgrade or withdrawal in the ratings assigned to the depositary shares, the Series F Preferred Stock, us, or our other securities, or any perceived decrease in our creditworthiness could cause the trading price of the depositary shares to decline significantly”

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