Thursday, March 28, 2013

5 New Preferreds To Replace Recently Called Securities

As the Federal Reserve continues to stress test banks and complete the Comprehensive Capital Analysis and Review process, various banks are being given the green light on their capital plans. While some of these capital plans include increasing dividends on common stock or beginning a share repurchase program, others include redeeming Trust Preferred Stock (TruPS) that will no longer be treated at Tier 1 Capital. At the same time, other financial institutions have been issuing new perpetual fixed-rate preferred stock that does count as Tier 1 Capital and is a low-cost source of funds for them.

Called Preferreds

Four major financial institutions have announced the redemption of Preferred Securities recently:


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Sunday, March 24, 2013

Citi's New Offering Is A Great Deal

After calling four Trust Preferreds on March 15, Citigroup raised $500 million on March 19 by issuing 20 million shares of their new 5.80% perpetual fixed-rate preferred, Series C. The position is currently trading OTC under the ticker symbol CITGL and is expected to trade on the NYSE within 30 days (the permanent symbol is still yet to be determined).


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Is Wells Fargo's New Preferred Stock The Beginning Of The End?

On March 15, 2013, Wells Fargo raised $525 million by issuing 23 million shares of a new 5.25% perpetual fixed rate preferred, Series P. The new issue is currently trading OTC under the symbol WFCOL and will begin trading within 30 days from issue on the NYSE under the ticker WFC-P.


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Wednesday, March 20, 2013

5 Mortgage REIT Preferreds To Consider, Part V: ARMOUR Residential

This series on mortgage REIT (mREIT) preferreds has focused on both hybrid and Agency mREITs. In the Part I we took a look at hybrid mREIT Apollo Residential and in Part III we analyzed the preferreds of AG Mortgage Investment Trust. The even posts of this series have focused on Agency mREITs - in Part II we analyzed Annaly Capital Management and it Part IV we focused on American Capital Agency Corp. Well it's time to buck the trend and in Part V we are going to stick with the Agency mREIT sector as we analyze ARMOUR Residential REIT.

Snapshot

ARMOUR Residential has two preferred stocks outstanding - the Series A 8.25% Cumulative Perpetual Preferred (ticker: ARR-A) which was issued in May 2012 and the Series B 7.875% Cumulative Perpetual Preferred (ticker: ARR-B) which was issued in February 2013. Like the common stock, both preferreds pay monthly dividends on the 27th of each month with record dates of the 15th.

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Thursday, March 14, 2013

It's Time To Buy Citigroup Trust Preferreds

On Tuesday, March 12, three Citigroup (C) trust preferreds began trading Ex-Div. By trading down because investors will not receive the March 15 dividend, Citigroup Capital Trust XVII 6.35% (Ticker: C-E), Citigroup Capital Trust XV 6.50% (Ticker: C-U), and Citigroup Capital Trust VII 6.95% (Ticker: C-Z) are all priced at compelling levels.

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Monday, March 11, 2013

Buy Morgan Stanley's TruPS Before They Trade Ex-Div

Morgan Stanley has four Trust Preferred Securities (TruPS) that will trade Ex-Div in the coming weeks. On Wednesday, March 13, the 6.25% Morgan Stanley Capital Trust IV (Ticker: MWG) will begin trading Ex-Div. For the triskaidekaphobics out there (or for those who are interested but want a little more time to act), the 6.45% Morgan Stanley Capital Trust VIII (Ticker: MSK), the 6.60% Morgan Stanley Capital Trust VII (Ticker: MSZ), and the 5.75% Morgan Stanley Capital Trust V (Ticker: MWO) all trade Ex-Div on Tuesday, March 26.

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5 Mortgage REIT Preferreds To Consider, Part IV: American Capital Agency

So far in this series we have taken a look at hybrid mREITs Apollo Residential in Part I and AG Mortgage Investment Trust in Part III, as well as Agency mREIT Annaly Capital Management in Part II. It only seems right to continue flip-flopping back and forth between hybrid and Agency mREITs - therefore in Part IV we will take a look at American Capital Agency Corp's 8.00% Series A fixed rate cumulative preferred stock (ticker: AGNCP).

Snapshot

American Capital Agency issued its only preferred stock at the end of March 2012. It pays quarterly dividends on the 15th of January, April, July, and October, and is callable in April 2017. AGNCP will begin trading Ex-Div at the end of March.

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