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One New Preferred Stock IPO In February - And It Yields 8.625%

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Book pinch page astir preferred stock. Trading concept.

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New offering summary:

CDX3Investor.com

CDX3Investor.com

To commencement nan year

CDx3-compliant preferred stocks (and ETDs) rated 10 retired of 10 moved little successful value during nan period of February, but still person year-to-date value gains and now waste and acquisition astatine a discount to par of astir 3.7% arsenic a group.

CDX3Investor.com

CDX3Investor.com

This successful move has near nan existent output for nan group astatine conscionable astir nan 6% mark:

CDX3Investor.com

CDX3Investor.com

About nan caller issue

This month's caller preferred banal offering was from Ellington Financial (EFC), an externally managed institution that invests successful financial assets specified arsenic residential and commercialized owe loans. The institution said proceeds from nan offering would beryllium utilized to get further assets for investment. The company's communal banal marketplace headdress stands astatine astir $775 cardinal presently (based connected caller communal banal prices astir nan $12.80/share level for EFC astatine nan clip of this writing).

The offering was for 4 cardinal shares of caller Series C "fixed-rate reset" cumulative preferred stock, pinch an overallotment action for an further 600,000 shares. A in installments standing of A- was obtained from Egan-Jones Ratings Company. The dividend complaint was group astatine an charismatic 8.625% first complaint until April of 2028 (at which constituent nan shares go callable by nan company), and if not called nan dividend will reset to nan then-current 5-year US Treasury Rate positive a dispersed of 5.13%.

As a constituent of reference, nan current 5-year Treasury complaint astatine nan clip of this penning is 4.208%, which pinch a 5.13% dispersed would pencil retired to 9.338%. However, nan caller output for this preferred banal astatine nan first reset successful 2028 will dangle greatly connected what happens to nan marketplace for 5-year US treasury bonds betwixt now and then. But until that time, investors are offered nan first fixed 8.625% dividend rate.

The caller Series C preferred shares traded temporarily connected nan OTC nether awesome EFCRP earlier moving to imperishable awesome EFC-C connected nan New York Stock Exchange. During nan impermanent OTC trading period, shares were obtainable beneath their $25 offering price; and arsenic of this penning nan shares proceed to alteration hands beneath nan offering price, pinch a to-date debased of $23.91 and a $24/share value successful caller trading connected nan NYSE arsenic of this writing.

SEC filing for further information: EFC-C

Buying caller shares for wholesale

Preferred banal IPOs often impact a impermanent play during which OTC trading symbols are assigned until these securities move to their unit exchange, astatine which clip they will person their imperishable symbols. (For illustration nan caller Ellington Financial preferred mentioned above, EFC-C, traded temporarily connected nan OTC arsenic EFCRP).

But location is nary request to wait. Individual investors, equipped pinch a web browser and an online trading account, tin often acquisition recently introduced preferred banal shares astatine wholesale prices conscionable for illustration nan large guys (see "Preferred Stock Buyers Change Tactics For Double-Digit Returns" for an mentation of really nan OTC tin beryllium utilized to acquisition shares for discounted prices).

Those who person been pursuing this strategy of utilizing nan wholesale OTC speech to bargain recently introduced shares for little than $25 are much capable to debar a superior nonaccomplishment if prices driblet (if they take to sell).

Your agent will automatically update nan trading symbols of immoderate shares you acquisition connected nan OTC, erstwhile they move to their imperishable symbols. A typical statement regarding preferred banal trading symbols: Annoyingly, dissimilar communal banal trading symbols, nan format utilized by exchanges, brokers and different online quoting services for preferred banal symbols is not standardized.

For example, a fixed Series A preferred banal mightiness person a awesome ending successful "-A" astatine TDAmeritrade, Google Finance and respective others but this aforesaid information whitethorn extremity successful "PR.A" astatine E*Trade and ".PA" astatine Seeking Alpha. For a cross-reference array of really preferred banal symbols are denoted by sixteen celebrated brokers and different online quoting services, spot "Preferred Stock Trading Symbol Cross-Reference Table."

Past preferred banal IPOs beneath par

In summation to covering caller preferred banal and ETD offerings, present astatine CDx3 Notification Service we besides way past offerings, pinch alerts erstwhile securities autumn beneath their par values. Here are immoderate of nan caller dips/crosses beneath par we observed:

CDX3Investor.com

CDX3Investor.com

Note: Any yellowish highlighted entries bespeak eligibility for nan "CDx3 Bargain Table."

Until Next Time…

Here astatine CDx3, our emblematic articles will supply month-end preferred banal (and ETD) IPO summaries, positive a look astatine selected past preferred banal IPOs that are now trading beneath par. Whether you are nan benignant of investor who sticks pinch preferred stocks pinch a CDx3 Compliance Score rated 10 retired of 10, aliases whether your portfolio has room for 9-score-and-lower securities, enactment tuned for early articles recapping caller IPOs and absorbing preferred banal activity that we announcement present astatine nan CDx3 Notification Service. Thanks for reading!

This article was written by

Preferred Stock Investing floor plan picture

Whether you are nan benignant of investor who sticks pinch preferred stocks pinch a CDx3 Compliance Score rated 10 retired of 10, aliases whether your portfolio has room for 9-score-and-lower securities, enactment tuned for early articles recapping caller IPOs and absorbing preferred banal activity that we announcement present astatine nan CDx3 Notification Service.

Disclosure: I/we person nary stock, action aliases akin derivative position successful immoderate of nan companies mentioned, and nary plans to initiate immoderate specified positions wrong nan adjacent 72 hours. I wrote this article myself, and it expresses my ain opinions. I americium not receiving compensation for it (other than from Seeking Alpha). I person nary business narration pinch immoderate institution whose banal is mentioned successful this article.

Editor: Naga



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