mREIT AGNC Investment Corporation Prices New Preferred

Giant mREIT AGNC Properties (NASDAQ:AGNC) has priced their previously announced new fixed-to-floating rate preferred with an initial fixed rate of 6.50%.

The REIT will sell a whopping 14,000,000 shares with another 2.1 million available for overallotment.

Unfortunately the OTC Grey Market ticker has not yet been announced (assuming there will be one).

NOTE–the permanent ticker appears to be different from the one they printed in their preliminary paperwork.

The final pricing term sheet can be seen here.

7 thoughts on “mREIT AGNC Investment Corporation Prices New Preferred”

  1. NLY preferreds always pay slightly less than AGNC preferreds so not an even comparison. Pays significantly less than AGNCM so by comparison I don’t see it rising much except by IPO mania. Could be another NRZ-B. The float reset value is much higher, not sure how to evaluate that since FtF is a recent trend we haven’t seen them play out yet.

    1. Cumulatively, AGNCM will pay 41 cents more than AGNCO before it goes floating in 4.5 years. Once floating, it’s yield will be 80 bps lower so it will pay 20 cents per year less than AGNCO.

      AGNCO should probably be priced within 10-15 cents of AGNCM. I’m not surprised AGNCM took a hit on news of AGNCO.

      1. Hope you’re right because I’m buying it too, just not as optimistic. AGNCM stripped value is under 25.50, so you’re showing a 20.35 value. Floating rate isn’t worth as much if they call these things we don’t know how it plays out yet.

        1. They’d only call a live floating preferred if rates were trending higher and they want to lock in a rate. Not a high probability scenario right but who knows in five years. Good point about accumulated div on AGNCM. Personally, I prefer to err on the side of highest Libor spread even if it means losing a few dozen cents of divs over the next 5 years. Higher L spread provides more protection against lower rates, so it’s a more defensive position.

  2. Nice Libor spread considering it’s only a 6.5% coupon. Same spread as NLY-I and NLY-F even though their coupons are higher. This should trade strongly pretty quick. NLY-G is at par and has the same coupon but has a much weaker Libor spread.

    NLY-I is at 26 and only has a 25 bps higher coupon and the same Libor spread. That means NLY-I will pay 30 cents more than the new AGNC preferreds over the next five years until they both are floating at the same spread. So benchmarking off of NLY-I, new AGNC should be worth 25.70.

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