Texas banker Tectonic Financial has announced a new fixed-to-floating rate preferred.
The company will issue 1.5 million shares of a $10/share preferred with an initial coupon of 9%. Dividends are non-cumulative and should be qualified. The issue is unrated.
The coupon will be fixed until 5/14/2024 after which it will float at a rate of 3 month Libor plus a spread of 6.72%.
Shares will trade on the NASDAQ under ticker TECTP. Thus far no OTC Grey Market ticker has been announced.
While we have not had a chance to look over Tectonic potential investors would be well advised to scrutinize the company’s financials. With a 9% coupon it should go without saying that the risk is elevated.