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The Royal Bank of Scotland Group plc Message Board

  • rexobXIP rexobXIP Apr 23, 2009 1:52 PM Flag


    I'm looking for a good explanation as to why the preferred Fs are trading at so much of a premium to, say, the Rs. The Rs yield is about 80% of the Fs, however the R is only trading at about 72% of the F share price.

    Obvious advantages of Fs aside from Higher yield:
    Closer to being redeemed based on both redemption rate and yield.
    Some say different terms than later preferreds(though RBS says that this is not so, and the differences in the language is splitting hairs).

    Advantages of Rs:
    Higher current yield
    Lower cost relative to par = bigger profit if ultimately redeemed at par
    Later issue has resulted in lawsuits for the R,S, and T that could result in early redemption, or the ability to collect damages from RBS and/or the issuers/underwriters.

    All in all, the Rs seem like a better deal to me, but I wanted others thoughts and input.

4.68+0.08(+1.74%)Sep 28 4:02 PMEDT