New Residential Investment to Sell FTF Preferred

mREIT New Residential investment (NYSE:NRZ) will be selling a new fixed-to-floating rate preferred.

The new issue will have a permanent ticker of NRZ-B and we are awaiting the announcement of the OTC Grey market ticker.

The optional redemption (and floating rate period) will start in 8/2024.

The issue will be unrated and being a mREIT the shares will be cumulative, but non-qualified.

The preliminary paperwork can be seen here.

The company sold an issue of FTF preferred in June and the issue carries a coupon of 7.50% with a 5.82% spread when it begins to float. That issue can be seen here.

Thanks to Eugene who noted this 25 minutes ago in the Reader Initiated Alert page.

29 thoughts on “New Residential Investment to Sell FTF Preferred”

  1. Just talked to the Preferred Trader at SCHWAB and he promised it will be available for trading tomorrow under symbol NRZEP

  2. If you’re a Fido customer and you’re interested in this, you might as well just call the fixed income desk first and beg them to do the order. From my last attempt, they don’t allow direct online purchases of FtoF’s.

    1. I have not had a problem with Fidelity when the F-F are trading under the OTC symbol. They usually have these available for trade before Schwab. It is when they go to NYSE symbols that is when you have to deal with big brother!

      1. yeah you have grab them before fidelity locks them down. That’s why i grab them on the grey market.

  3. Anyone able to trade this? TD Ameritrade snapticket says “symbol not found” when you try entering it to trade….but when you type in that symbol in the snap ticket for a quote, it shows 512k volume, but no bid/ask.

    1. All the institutional , pre-public trades. 1.9 Million now. Dark door. You can usually see the participant category over on FINRA. Won’t hit til market open tom. for the Unwashed.

  4. Tim,
    Just curious. Sold 1,000 sh of NRZ-A (4% gain); but, it was 10 transactions
    of 100 shares (?).

    1. Ed–yes that can certainly happen. Normally not 10 transaction but many times 2 or 3. Not a big deal as long as they charge you just for just 1 transaction–normally as long as they all occur the same trading day it is just 1 charge–if it carries into the next day they charge you again. If you are charged more than once you need to do some butt chewing.

      1. …that’s right and do not alter the order once it starts to trigger that first order fill to day’s close…or it’s a new order.

  5. Oh I definitely like it — I wouldn’t own the common and, yes, these financial REITs always have some risk to them. But you have a very solid book value, and the preferred dividend totals (the A was just $2 to $3 million per quarter) pale in comparison to the common dividend amounts ($200 million). Not saying it’s going to be my largest position but I think it’s relatively safe for a high-yielder. Just my take of course.

  6. As much as I want to buy this (or anything at a good yield/price at this point!) going to pass because the common stock is a wreck, yielding 13.28%, with an unsustainable payout ratio and lots of other bad metrics that seem to be a flashing red light. if anyone disagrees, i’d love to hear a reason to buy it (other than a flip).

    1. Franklin, I’m with you on the assessment of the common shares. Although… there are some authors on SA that want to convince you that owning the common would be the best thing to happen since some monk in Dark Ages Europe learned to brew beer.

  7. Maybe because NRZ-A sold better than they expected. Someone here had a story about how the underwriters begged the company to offer more yield on NRZ-A, and they refused. Apparently, the company was right and the underwriters were wrong about the appetite for their security. The MSR market can change rapidly, so maybe this is a good time for cheaper financing.

  8. Good grief, so soon after NRZ-A? Any thoughts as to why a new issue is coming out so fast after the other one?

    1. Apparently it is to finance an asset purchase. I sold the A shares this morning and i will try to buy the new preferred closer to par.

    2. It looks like they’re buying the Ditec assets. Don’t know if they need more capital or just reloading with dry powder to get ready for their next acquisition. I’ll skip this as I’m overweight the common in my stock account.

        1. Mikey, Actually, I don’t really care. NRZ is 25% above my purchase price and paying 13% at current share price. It can sit there like a lump forever and I’ll be ok. I run my stock account with a priority on yield. Capital gains are secondary. But the earnings need to be watched as dividend cuts for an income stock like this can be devastating.

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