Thu, Sep 18, 2014, 12:21 AM EDT - U.S. Markets open in 9 hrs 9 mins

Recent

% | $
Quotes you view appear here for quick access.

Countrywide Capital V (New) 7.0 Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • wheelbarrowme wheelbarrowme Jul 16, 2011 2:13 AM Flag

    few shares available...pushing up price

    Wrong. The IPO price was $25 a unit, but BAC can call at any price, even $21 bucks. All trust preferreds will be phased out over several years since they will no longer be counted as Tier 1 capitalization, unless a small bank, which BAC is not. The price here approaches $25 in anticipation of recall at $25. Enjoy the $1.88 a year interest meanwhile.

    • wheelbarrowme,

      You wrote, "Wrong. The IPO price was $25 a unit, but BAC can call at any price, even $21 bucks. All trust preferreds will be phased out over several years since they will no longer be counted as Tier 1 capitalization, unless a small bank, which BAC is not. The price here approaches $25 in anticipation of recall at $25. Enjoy the $1.88 a year interest meanwhile."

      Just to clarify, the par value is $25/share and while they can call the issue regardless of the current price, the price they must pay is $25/share plus any accrued, but unpaid interest. (See prospectus for details.)

      Problems occur on callable issues if you purchase them while they are above par and they are called. In that case, you risk suffering a quick capital loss on your purchase so you need to be sure to purchase the issue not far above its par value plus any accrued interest.

      And right now all Capital Trust preferreds are effectively callable because of Frank-Dodd, regardless of the call date listed on sites like QuantumOnline.com. Frank-Dodd created a series of "Regulatory Events" as defined in the various Capital Trust prospectus, which serve as an exception to the stated call date.

      - Joel

 
CFC-PB
25.49-0.09(-0.35%)Sep 17 4:00 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.