mREIT AGNC Investment Prices New Preferred

AGNC Investment (AGNC) has priced the previously announced fixed-to-floating rate preferred issue with an initial coupon of 6.125%. Starting in April, 2025 the coupon floats at 3 month Libor plus a spread of 4.697%.

Shares will trade immediately on the OTC Grey Market under temporary ticker AINGZ.

The pricing term sheet can be read here.

Bob-in-DE picked up the FWP (free writing prospectus) and OTC tickers instantly.

21 thoughts on “mREIT AGNC Investment Prices New Preferred”

  1. Harvey, did you place the order with ML online or with a broker?
    I have not been successful buying OTC Grey Market online with them.
    Tried this morning with COF-J and ending up going to Fidelity for purchase at 24.80.

  2. Quick 5 million share ssold and then it slowed down and priced dropped a couple cents. Now selling $1 less than AGNCO. And more than $1 less than AGNCM which doesn’t make sense considering the float rate.

  3. Apparently Vanguard got it straightened out – I was able to buy AINGZ at 25.01 at 10:50a without rep assistance.

  4. Fidelity’s nanny state won’t allow online purchase.
    Ameritrade is rejecting the order with no reason given.
    Schwab’s street smart doesn’t show it. I logged into their old site and was able to buy it.

      1. I noted that TDA charged me a transaction fee ($6.95). Are they charging a fee for OTC ?

    1. Fidelity won’t allow online purchases but a rep will take your order. Don’t forget to remind them to waive the usual$32 or so assistance fee. Yes, I find it annoying too and never miss a chance to tell them so. The floating feature is what triggers the problem.

        1. James, I’m sorry if I gave the impression that I actually made the purchase of this issue from Fidelity. Actually, I’m not able to buy anything currently as I’m trying to accumulate enough cash to meet my RMD obligation. I was referring to buying any issue with a float from Fidelity. My fault for not being clearer.

        1. You can trade it online at Fidelity today. On occasion there system has a one day delay on a new grey market issue. This must have been one of them

      1. FWIW, I was able to put in online order at Fidelity this AM. Typically, they’ll allow it for a few weeks or it goes off “gray” market, although never know exactly. I bought AI.PRC online one day, tried to buy more the next day and got the usual “not allowed” window.

    1. Hi Bob, Have to go with YTC, which $ for $ of investment delivers the highest cash to term. For issues yielding a lower cash to term (lower YTCs), it’s an uphill battle just to breakeven with the issues that have higher YTCs – even if they have higher spreads at reset. In fact, they will have to reset with the higher spread to start that climb, which depending on the situation could take years to equalize the distributions of the higher YTC.

  5. better YTC but otherwise weaker than other AGNC preferreds. Which begs the question, How likely is a call? fixed-to-float issues are too recent to have a track record for calls. Need an estimate of call likelihood to properly evaluate.
    My guess is there won’t be a lot of calls at first opportunity. The floating rate reduces the amount of outlying prices.

    1. Martin G, when the call date comes, AGNC will be looking at the spread as their cost and the coupon will be irrelevant. So that tells me that, once call dates are in play, AGNC will want to retire AGNCN as the first priority (also the first to become available to call) and then AGNCO. This issue is third priority, and then I don’t know how they got away with the low spread on AGNCM, which perhaps will never be called ever given its narrow spread. I suppose as an investor, the ideal issue is one that, after the call, trades at a slight premium to redemption value because the issue offers above market interest rates, but not so high above market that it would pay for the issuer to absorb the refinance costs. As lousy as this initial yield seems, I suspect the underwriters priced it knowing the demand. It seems to me that this issue should trade below $25, but I never thought AGNCM would trade above $25. This security may be good for trading on relative value, but I’d rather keep my N and O till called, and hope I have a better idea when the time comes.

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