I got the new 5% bonds of 5/15/2015 yesterday at 98.825 for a YTM of 5.4% on a 4 year. There seem to be plenty of the bonds available, with trades on large orders as low at 97 and change. This is a pretty good deal on a 4-year, probably because NLY didn't get a rating from Moody's or S&P. But it's senior to the common and preferred, and there is plenty of room to cut dividends on the stocks if needed to pay the bonds, so I'm a happy camper with the bonds.
NLYPP preferred 7.625% began trading Friday and closed at 24.76. trading favorably to NLY-A which fell to 25.81, pays only .3% more and is callable now. I look for the price difference between the 2 to narrow.
Hoe does this issue affect common stockholders? basically it increases leverage indirectly without the risks of higher leverage. preferred holders are paid a lower div and much of the difference goes toward a higher div for the common. but when the divs eventually go down the preferred is still due its fixed rate, leaving less for the common.
also this issue is tapping a market with less tolerance for volatility. continue growing without the same diltuion.