Regional banker Regions Financial (NYSE:RF) has priced their new issue of fixed-to-floating rate preferred stock with an initial coupon of 5.70%.
Of course this low coupon is disappointing to me, but was kind of expected as a number of readers had some early indications of this low coupon.
Honestly I just wish that 1 time the marketplace would reject low coupons that are junk rated–just once. Of course I “talk my book” as I would like to find something decent to buy. For now I will continue to reject low coupons and patiently wait for a higher coupon new issue–or a tumble in markets to provide the current yield I want to buy (6.25% to 7% depending on the issue).
This issue is rated BB+ by S&P, Ba1 by Moody’s and BB- by Fitch–solidly non investment grade.
The new RF issue will begin to float on August 15, 2029 at a rate of 3 month Libor plus a spread of 3.148%.
Shares will be non-cumulative, but will be qualified for lower tax treatment.
The company will sell 20 million shares–no over allotment shares are going to be available.
Shares will trade tomorrow under the OTC Temporary ticker RXFCL which will change to permanent ticker of RF-C once the issue moves to the big board.