Medallion Bank Sells New Preferred

As some on the site already know Medallion Bank (a division of Medallion Financial (MFIN)) has sold a new issue of high yield preferred stock.

Note that this was sold last week, but has just begun trading. It is trading weak–now at $24.48.

Note that this issue is floating starting in 2025 and is NOT trading with a 3 month Libor rate, but is with 3 Month SOFR (the replacement for 3 month Libor). You can see the SOFR page at the New York FED here.

The coupon on this issue is high because they are a higher risk lender. Parent company Medallion Financial was the main lender for taxi medallions which has become a very poor business with the advent of Lyft and Uber. Recent financials appear to show they are slowly recovering by reducing taxi medallion lending drastically–which has involved many writedowns in the past.

Approach this issue with caution and make sure you do your due diligence.

The best place for research is the company website–here.

Medallion Bank is regulated by the FDIC so they do NOT file with the SEC.

Parent company Medallion Financial has a 9% baby bond outstanding which trades well–now at $26.33

For those wanting to access the FDIC regulated filings you can go here and then search by Medallion Bank.

27 thoughts on “Medallion Bank Sells New Preferred”

  1. Nice to know I didnt lose my shirt today on this issue. Price actually stiffened a bit to $24.62 on 5 times increase of yesterdays volume….Safe for one more nights sleep anyways, ha.

  2. The underwriters exercised their right to purchase the greenshoe in addition to the original allotment.

    NEW YORK–(BUSINESS WIRE)– Medallion Financial Corp. (Nasdaq: MFIN, “Medallion Financial”) announced today that its wholly owned subsidiary, Medallion Bank, has closed an initial public offering of 1,840,000 shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, par value $1.00 per share, with a liquidation amount of $25 per share (the “Series F Preferred Stock”) and an aggregate liquidation amount of $46 million, which includes the full exercise of the underwriters’ option to purchase an additional 240,000 shares of the Series F Preferred Stock. The offering priced on December 10, 2019.

    1. Interesting. I was concerned about the low volume. It sure didn’t look like the 1st day of trading for an 8% coupon. Perhaps the institutional players grabbed a chunk like you speculated in an earlier post.

  3. Usually, I don’t like companies renaming themselves to get rid of a stigma but in this case it may be a good idea. I can’t remember the last time I took a taxi.

    8% ain’t enough for this cowboy. And flipping wears me out.

    1. Ha, Bob, that correction tool works wonders on a delete… I thought your 8% reference was to the 8% that the medallion business occurs of the company, not the yield. I definitely respect the sideline decision.

  4. 1.6 million shares are available plus a greenshoe if underwriters take it. Only ~20,000 shares have traded today. Am I the only one that bought this, (no I didnt buy 20,000, ha) Underwriters bought at $24…. Being this is not SEC registered under 1933 Act, I wonder if insiders and private buyers took many of these or if they are going to struggle to get them out the door. I guess we will find out in due time.

      1. Tim, Im assuming Newman joined us. I got 200 from scraps in my TD account at 24.72 and 1300 at $24.50 when they just kept selling there after Vanguard got the problem fixed. Im assuming 2 White Roses joined us also, lol… Im way out of bounds on this flip, bought too many. I rarely buy this many and especially of this dreadful ilk. One of these days Im going to get taught a lesson. This may be that one.

        1. Grid–yes not the best issue, but just did a starter of 200 and wanted to wait for stability before getting more so will just patiently await for stability before making up my mind on further purchases.

          1. Tim, Your FDIC access was interesting. Of course the companies metrics look decent compared to a local group of banks I recognize. But, surface looking of a banks financials is really of somewhat limited value being that banks overall quality is more complicated than rudimentary statistics. The loan for allowances isnt bad considering their field of loans. Im owning, but declined an invite to join the fan club.
            Interestingly there are a lot of small town banks that have non tradeable preferreds on their books. A little secret sauce for the insiders Im sure.

            Timdman, yes I mostly own quality volume wise, so this one sticks out like a sore thumb in my portfolio.

        2. Yep….we all will get a spankin someday. Hope not just yet. I’ve got a bunch of pretty solid dividend payers and put a little on the side to spice up the yield.

        3. Hahaha, glad you clarified that quantity Grid, I was thinking 1500 might be only a half position for you.

          I’m in for a measly 200 @$24.48 thru Schwab.

          1. Mikeo, This is not chump change for me, so I should have been in the 200-400 camp myself. But my pension check comes again in 2 weeks so food will be on the table even if it hits zero quickly, ha.
            I rarely do this outside of venerable ute preferreds. But these high yield QDI issuances typically get more of a market pass than a non QDI preferred.. A very high SOFR yield also.
            Financials look good enough and economy ok for now, so Im giving it a shot. I dont like the fact first divi is in April, so I may have to hold longer than I want. Ideally I can bang out some flip money and keep a few hundred as a long term hold. But generally I am more in Bob’s camp on these types.

  5. The comments here piqued my interest and i left in a bid for 200 shs at 24.47.
    Yes ! The print low ! (Todays anyways)
    I liked The Moonman when he played for the Mets. His birthday is in 4 days .
    Tim, I was just thinking Would it make sense to start a “Lifestyle” category?
    My time spent here is now about 3 hours a week.
    Why not add categories for us to “lounge” in like our Music tastes while trading or at relaxation. Entertainment as well.
    You can see some readers quoting wise sayings, music lyrics and movie references.
    I know this is not the core mission of your amazing website, but heck, you can even monetize those pages.
    Best regards,

    Aya Aye Aye Captain. ( III ) get it?
    I love double entendres and have even quipped triple entendres .

    1. Newman–will give it some thought and see what makes sense as far as adding some ‘rooms’.

    2. Newman, Im glad you got the reference, ha… This is not a 1933 registered security.
      https://www.medallionbank.com/wp-content/uploads/2019/12/Exhibit-99.2-Underwriting-Agreement.pdf

      Typically this means most shares are privately placed. There was no mention of 144A rule being involved. The bank technically is private being owned by Medley Financial which also allows such endeavors.
      The holding company used to be heavily involved in taxi Medallions which is almost as valuable as Enron stock is now. But they have got this down to 8% of their business, which has allowed the common to climb out of its grave.
      Feds put additional limits on the bank in what amounts it could be involved in on this dinosaur business. All in all there is a reason it is 8%, and charity isnt one of those reasons. The bank appears to like to make loans of the type Gweedo in a competing same segment loan business would break your knee cap to remind you that you missed a payment.

        1. My apologies, David. I should be more aware I guess, as I wasnt thinking that way, using only it in terms of generic figure of speech only.

            1. David, we just come from all areas of the world, so things have different meanings, so that makes it tough. Hey, you can post any joke directed at me. My girlfriend has hardened me over the years as many have been fired at me over the past 13 years. Never a day goes without a zinger fired my way from her, lol.

              1. 2WR, Phonetics fail me sometimes…Im worried now because Tim has called my bluff with this correction tool. Now I risk being exposed as an uneducated person, because I cant blame lack of ability to correct an “accidental” keyboard typing fat finger error. 🙂

                1. You’ve given enough of yourself on this site , Grid, that I think we all know that deep down, you gots plenty couth.

                  1. For what we do, financial literacy is way more important than proper grammar. I can’t say that I ain’t never gonna use a double negative. I used to work with a guy who said he spoke two languages-work and home. Home when his wife was around and work when she wasn’t. I think we’re all like that. Time and place for proper phraseology and a time and place to do whatever it takes to get one’s point across.

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