The difficult environment for raising capital has lead to many
companies issuing preferred stocks. These new preferred stock issuances have
been large when compared to previous offerings. The issuing companies have had
to offer attractive terms to sell these large offerings, this has been
especially true in the financial sector where many new offerings have high
dividend rate and some include options to convert to common stocks.
Some recent issues
1) Federal
Home Loan Mortgage Corp Series Z fixed to floating rate dividend with a liquidation
preference of $25.00 per share (FRE-PZ). The $6 billion issued pays a quarterly
dividend when and if declared by the Board of Directors
at fixed rate of 8.375% until 2013. Thereafter the rate is variable based on Libor
+ 416bps with a 7.875% floor. Summary of the terms of this preferred stock can
be view at http://preferredstockcentral.com/FREPZ.php
2) Bank
of America Corporation 7.25% Non-Cumulative Perpetual Convertible Preferred
Stock Series L with a liquidation preference of $1,000.00 per share (BAC-PL). The
$6 billion issue pays a quarterly dividend when and if
declared by the Board of Directors at fixed rate of 7.25%. The holder
also has the option to convert the preferred stock into 20 shares of common
stock equivalent to exercise price of $50.00. Summary of the terms of this preferred
stock can be view at http://preferredstockcentral.com/BACPL.php
3) Merrill
Lynch & Co. Inc 8.625% Non-Cumulative Preferred Stock Series 8 with a liquidation
preference of $25.00 (MER-PQ). The $2.7
billion issue pays a quarterly dividend when and if declared
by the Board of Directors at fixed rate of 8.625%. Summary of the terms
of this preferred stock can be view at http://preferredstockcentral.com/MERPQ.php
4) Wachovia
Corporation 7.50% Non-Cumulative Perpetual Convertible Class A Preferred Stock
Series L with liquidation preference of $1,000.00 (WB-PT). The $3.5 billion
issue pays a quarterly dividend when and if declared by the
Board of Directors at fixed rate of 7.50%. The holder also has the option
to convert the preferred stock into 32.0513 shares of common stock equivalent
to exercise price of $31.20. Summary of
the terms of this preferred stock can be view at http://preferredstockcentral.com/WBPT.php
5) Lehman
Brothers Holdings Inc 7.25% Non-Cumulative Perpetual Convertible Preferred
Stock Series P with liquidation preference of $1,000.00 (LEH-PP). The $4
billion issue pays a quarterly dividend when and if declared
by the Board of Directors at fixed rate of 7.25%. The holder also has
the option to convert the preferred stock into 20.0509 shares of common stock
equivalent to exercise price of $49.87. Summary
of the terms of this preferred stock can be view at http://preferredstockcentral.com/LEHPP.php
6) Federal
National Mortgage Association 8.75% Non-Cumulative Mandatory Convertible
Preferred Stock Series 2008-1 with liquidation preference of $50.00 (FNA
proposed symbol). The $2.25 billion issue pays a quarterly dividend when and if declared by the Board of Directors at fixed rate
of 8.75%. The preferred stock will be converted into common stock on 5/13/2011 in the range of 1.5408 to
1.8182 shares. The conversion price is based on the average of the closing
prices of FNM common stock over the 20 consecutive trading day period ending on
the third trading day immediately preceding the mandatory conversion date. Summary
of the terms of this preferred stock can be view at http://preferredstockcentral.com/FNA.php
For more information on preferred
stocks as well as detail knowledge of a particular publicly traded issue visit http://preferredstockcentral.com