Prudential Financial to Sell Baby Bonds

Prudential Financial (NYSE:PRU), a giant financial services company, has announced a new baby bond with the maturity date being in 2058.  Details are not yet available.

The company has 2 baby bonds currently outstanding with coupons of 5.70% and 5.75% both of which are trading above $25.

Preliminary details can be found here.


7 thoughts on “Prudential Financial to Sell Baby Bonds”

  1. Generally, my kind of investment meaning investment grade rated. Not thrilled with the option to defer interest for up to 5 years but on positive side dividends will be cumulative. Suspect coupon will be similar to Allstate and MetLife early this year which was 5.6%. We’ll see.

    Jamie Dimond is a smart man, today he is espousing his beliefs that the 10 year could hit 5%. I don’t agree with him. With that said, in case, he is right I’d love my investment graded rated to be 6% or higher to be positioned for higher rates. Doubt this one gets to that level.

      1. Thanks RazorbackEA–I had seen that earlier but was too tied up to get the note out earlier.

    1. Hi SteveA–I always hate the deferral clauses–but if they use that they are in terrible trouble already.

      1. I worried years ago over that being I am distrustful and assumed it was a way
        to screw me over. But I researched many issues with this clause and never saw it happen unless like you said financially stressed in a maximum manner.
        AES had one of these and about went bankrupt 15 years ago. AES-C had this deferral clause and AES-C dropped to $4 back then ($50 par) and never once deferred payment and continued on back to par and was redeemed last year.
        OSBCP did use the deferral during bank crisis, but they would have went belly up without TARP. The payment got reinstated and now the issue steady pays above par despite being well past first call date.

        1. Hi Grid–yes I don’t lose sleep over these kinds of things, but still hate to see them.

          1. But with that being said, Tim, I suspect you agree, but I would much rather own GGO-A at $42 than any Prudential mid 5% perpetual debt. Solely for higher rate concerns than for credit risk. As we get the put and the modest adjustable rate feature. When dealing with lower (higher quality) perpetual issues, I would much rather go even lower with term dates or an adjustable feature than risk the perpetual capital risk.

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