New Residential Investment Prices FTF Preferred Issue

New Residential Investment (NYSE:NRZ) has priced their new offering of fixed-to-floating rate preferred with an initial coupon of 7.125%.

This seems to be 1/8% below what the original guesses were for this coupon. Importantly to investors the spread of 5.64%, once it begins floating, seems investor friendly.

It will be very interesting to see how this issue of 10 million shares trades tomorrow (Thursday). The company has a FTF 7.50% issue outstanding which was trading in the $26.50 area until today when it fell as low as $25.80 before recovering to $26.20. It is likely we will not have a personal interest in this one for a long term hold. Whether we want it for a ‘flip’ will depend on initial trading on the OTC Grey market.

The pricing term sheet can be seen here.

11 thoughts on “New Residential Investment Prices FTF Preferred Issue”

  1. Bought a bit just under par but really not that excited about it. I don’t see this as a great flip, their other issue is better and only trading at $26.20. I’ll just hold, should hang around par as long as shit doesn’t hit the fan.

    1. If it’s not a flip then A is a strong sell. Significantly lower yield to call and slightly lower yield post call at those prices. Should be less than a 75 point spread by my calculations. If A falls I’ll re-evaluate B.
      Somebody wrote a hit piece on SA this morning with inaccurate data. Maybe that’s why NRZEP slipped a couple points below par.

      1. Spread increased to 135 points so i held my breath and bought more. Bad move in NRZ falls off a cliff. Good move if they don’t.

  2. Grabbed 3000 shares planning to flip most of them. they;’ve already sold almost half of the allotted shares. Wonder why the underwriters aren’t holding out for a higher price with that kind of demand.

  3. Also picked up some (just 100 – was all the free cash I had at the moment). I also have 100 of their series A, and 290 of the common, so wasn’t trying to increase exposure that much.

  4. Just purchased 1000 at 25.05 on Schwab, it was not available to trade pre-market

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