Who makes money besides the underwriters replacing an 8.5% with a 7.5%. The fees associated with this deal eat up any savings to the company. This is a great deal to the underwriters though. Not only do they profit from large fees running the new Pref B, but they also profit trading on inside information when the Pref A drops a dollar.
never got an IR response. Given the news one possibility is to retire (call) the A's and replace them with them with the new B's,. It could also be a couple of big sellers in a thin market but that should not hold it down for long. Another possibility is for a new buyer the A's were returning about 8%, perhaps it is worth a half percent to gain 9 years of a surer thing. I am about breakeven at todays price but have collected interest for a good long time so my average return in a call is about 7% and slowly increases the longer they wait to call.
According to MFA's filing the proceeds from the B will be used to redeem the A. Looks like they plan to do accomplish this quickly as the first dividend is June 30, 2013, the same date for the A. MFA is using their success to pay a lower rate on their preferred
I got caught holding these as i have never seen mortgage reits redeem their preferred Always a first time but probably not the last in this interest rate environment I can see from the action of my other mortgage REIT preferred that they are headed down to par