Lots of Demand for Dime Community Bancshares Preferreds

The coupon is 5.50% and the expected rating by Fitch is BB- (speculative), but regardless investors are jumping all over this new issue from Dime Community Bancshares (DCOM) as it opened for trading around $25.40–and now is at $25.45.

This just goes to show how hungry investors are for yield–and these smaller banks have traded pretty decent in the last year.

I think this issue may trade similar to the new Triton International 6.875% issue (TRTN-D) where yield hungry investors bought it up on day 1 as it opened the 1st day on the OTC Grey Market at $25.28 (on 1/17), and is now trading at $25.38–lots of initial excitement and then a more muted response.

For myself personally I have no interest in jumping into this initial fray on the OTC Grey Market at these prices. Only at a much lower price would I have any interest at all–even with plenty of cash in our accounts this coupon simply seems to meager for a small banking company–although the issue will do fine as long as the economy remains decent.

13 thoughts on “Lots of Demand for Dime Community Bancshares Preferreds”

  1. Some interesting data points as of
    11:19am EST 1/31.20
    DIMEP is up to 25.50 now.

    CPONZ continues to fall now down to 24.82

    1. Crazy stuff Analog. Actually while I haven’t posted it yet I started tracking new issues from the 1st trade on the OTC Grey Market–out of curiosity more than anything.

  2. Just surprising to me that many investors would be excited by Fitch rated BB- Dime Community Bancshares (DCOM) 5.5% perpetual preferred. Interest rates rise just a bit and this issue will tumble hard or we have any type of banking crises because of financial over leveraged balanced sheets. This is NOT a recommendation and I urge everyone reading this to do your own deep due diligence before investing. I just bought AM
    I did initiate a position at Vanguard as they have the deepest bench of bond offerings with the best mark up/mark downs I have been able to find in low investment grade BAA3/BBB- PSEC corporate bonds 6.25% $100.29 due 3/15/29 CUSIP 74348YK59 Just have too much cash laying around and Prospect may have crappy management, a poor history but the stock seems like it’s been stable for quite a while now and they aren’t going bankrupt anytime soon…
    “Wealth is the product of man’s capacity to think.” Ayn Rand
    Smile, Nomad

  3. I have slowly been liquidating since December, sitting on 80% cash (ok 90 day CD’s). Hate to say I am rooting for a market correction, but with measly offerings like the one from Dime, I am now full on rooting for one.

    Also, want to add that I believe this is the best financial website I have run across for retirees like myself.

    1. I keep my cash in ICSH – decent yield and with zero commish these days, it is easy to go in/out w/o fees. Regarding this latest correction, it seems the preferreds are a flight to safety – all of mine, bought 24.50-25.25 are in the $26-ish area and bumping up this week.

  4. They are a small yet well known bank in the boroughs of NY and Long Island region. It seems almost every new issue is getting gobbled up.

    1. Mseni19–maybe they had lots of local interest which created some initial demand. We’ll see where it trades from here.

        1. Funny scene with the suit. Including “yutes”, a handful of Pesci-isms have infected the language in our home.

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