Midwest Banker Merchants Bank to Sell New Preferred Issue

Merchants Bank (MBIN) has announced a new issue of fixed rate preferred stock.

At the moment the company has 2 outstanding high yield fixed-to-floating rate issues outstanding which can be seen here. Neither issue is redeemable until 2024.

The issue will be qualified for a lower tax rate on dividends, but non-cumulative.

The preliminary prospectus can be read here.

EarlyBird was right on this one. EB also posits ‘yield talk’ in the 6.25%. The issue will not be rated by the major ratings agencies, but may be BBB+ from Egan-Jones.

18 thoughts on “Midwest Banker Merchants Bank to Sell New Preferred Issue”

  1. The other issue has traded thin since inception. For a long time I was kind of trapped. I only bought it cause common looked OK and I knew I might have to hold it. At some point recently it traded over 26 1/2 and allowed sales with some size. All I could figure was somebody was buying and not showing their hand. The other is a fixed to float so this new one might do OK!

  2. I have owned the FF issues but recently sold. It’s a solid but small central Indiana bank. The FF issues have a floor of zero on the base rate.

  3. I would love to hear from you bankers out there on this issue. I did spend some time on their homepage reading their latest quarterly report and their latest annual. They just raised their common dividend. Looks like they are using the proceeds to redeem their 8% issue.

    1. Chuck…which issue is that? I only see two preferreds both well below 8% and neither currently callable.

          1. MBNKP . Don’t believe that’s correct. The 8% referred to by Merchants was a private placement. Not registered or buyable anywhere.

            1. Bob, A4I was just giving an example of an issue from a bank that has an 8% coupon yield that is outstanding, as that was the question posed. He wasnt referring to MBNKP being an issue from Midwest.

              1. Yes, I see, I see. Not many 8% bank coupons left. One less with the Merchant Bank redemption.

              1. Actually there are a few 8%’ers from “banks” if people care to investigate and see if they are buyable/tradeable/defunct/whatever: FBPRO, WGNAP, ASRVP.

      1. If you go thru their prospectus that Tim provided the link to its clearly in there. It just takes time to read thru all of it. But thats how I found it.

      2. From the prospectus:

        “The Series C preferred stock will rank (i) senior to our common stock, (ii) equally with our 8% Non-Cumulative, Perpetual Preferred Stock, without par value, liquidation preference $1,000 per share (the “8% Preferred”)…”

        1. Looks like the higher yielding Series C preferred is not available to retail investors.

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