Synchrony Financial Prices New Preferred

Synchrony Financial (SYF) has priced the previously announced new preferred stock issue.

The issue is non cumulative, qualified and junk rated–even lower than we had thought it would be–down at BB-. The fixed rate coupon is 5.625%

It will be interesting to see this issue trade–at 5.625% we have no interest at all–of course if it fell in price substantially we would have to re-evaluate.

The pricing term sheet can be found here.

12 thoughts on “Synchrony Financial Prices New Preferred”

  1. SNFI… “purchase price $24.2125 per depositary share to retail investors”
    how does one get on this deal?

    1. $24.2125 per Depositary Share for Depositary Shares sold to retail investors and $24.75 per Depositary Share for Depositary Shares sold to institutional investors

      I cannot recall seeing this language in an offering before. Tough day to come to market with an income issue. I’m watching but not buying….

  2. Surprising that Synchrony isn’t investment grade. KInd of a well known name in that field. Haven’t followed them much, though.

    1. Ron–that is why yesterday I though this would come at BB+–I don’t know alot about them, but as I quickly perused the numbers I thought they looked ok.

  3. Took a small position thru Vanguard at 25.10
    Common Stock seems to be doing well and it is rated an A by Schwab for what that is worth. What IS that worth btw…a hill of beans? Or a small pile of legumes?

    1. Schwab rating is probably useless, but Warren Buffet owns 20 million shares of SYF – which is usually a good indicator.

    2. Adrian–would have to know how they define “A”. Like so many of these issues as long as GDP stays positive it will probably be ok, but right now I can buy some already callable investment grades for the same yield–although slowly but surely they are getting called.

    3. I always look at the Schwab ratings. Here is what they mean to me? A strong buy is a company that has a short term outlook that is positive for the common stock meaning they expect it to increase in value. That is all. Preferreds often follow the short term direction of the common.

      But to me, it is a very short term direction that can quickly change with news.
      I recently brought a Canadian preferred called APRWF paying 7.6%. The company AT is a $2.35 share stock. A very small amount of APRWF. The hope is that the preferred will track the common.

      I would not use Schwab’s A rating to interpet risk. AT is high risk. I could Sychrony is high risk.

  4. I probably won’t be buying any- but, since their Senior Notes due 2029 have a last trade yield of 3.585, this issue almost seems like a bargain

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