As we mentioned we had entered an order for the new Tristate Capital (NASDAQ:TSC) 6.375% fixed-to-floating rate preferred (TRSXL) this morning.
Our initial bid was $25.30, but it appeared this was inadequate, but didn’t intend to chase. We went ahead and entered a $25.50 order as the shares hit $25.92. Shares then fell back to the $25.50 where after 2 hours our order executed.
Into the close the share price started running again and closed at the high of the day of $26.00
This issue is following the trend of all of the smaller regional backs that are issuing fixed to floating rate preferreds–huge demand and skyrocketing prices.
TriState has a 6.75% fixed to floating rate issue (TSCAP) which is now trading at $26.90–see it here.
Merchants Bancorp sold a 7% fixed to floating issue (MBINP) which has traded as high as $27.60 recently–see it here.
Citizens Financial sold a 6.35% issue (CFG-D) that is trading at $26.65–see it here.
There are others. Quite honestly these are less than investment grade issues with current yields now under 6%, on many. If we owned any of these they would be gone in a minute. The risk reward is inadequate at these prices and yields.
We will flip out of the TriState Capital new issue at $26 or over–this is all we are after–4-6 steak dinners. There is too much froth in these issues and it will end badly for some investors.