Regions Financial Corporation (NYSE:RF) will be selling a new preferred issue.
The issue will be a fixed-to-floating rate issue and will have the normal terms for a banking preferred stock. It will be non-cumulative, but qualified for preferential tax treatment.
This issue will likely NOT be investment grade – the other issues RF has outstanding are a couple notches below investment grade.
There is 1 change and that will be that the issue will be fixed for 10 years (2029) before it moves to the floating rate period. Maybe 3-5 years ago most of the f-t-f issues had fixed rate periods of 10 years, but in more recent years that has moved to a 5 year fixed period–maybe we are going to move back to 10 year fixed periods. In theory the longer the fixed rate period the higher the fixed coupon should be–we shall have to wait and see. We do note that RF sold a F-t-F issue in 2014 and it has a 10 year fixed period at 6.375% and it has traded strongly in the $27.80/share area. You can see it here.