Diversified Financial Services Company Stifel Financial Sells a Preferred

By: ,

Stifel Financial Corp. (NYSE:SF), a full service brokerage and investment banking firm has sold a new issue of preferred stock. Being a financial services firm the offering is required to be a non-cumulative preferred offering with the typical preferred stock terms.  The shares are redeemable in about 5 years, at the option of the company, at par plus accrued dividends.

This issue is not investment grade rated and the shares carry a coupon of 6.25%, which while meager, is typical and we would consider this a reasonable issue for investors willing to be out just a bit on the risk curve.  

SF has made a number of acquisitions in the last year starting with ISM Capital, a London based independent investment bank.  Additionally, they acquired one of the oldest and largest privately owned financial firms in Stern Agee which adds greatly to the company’s asset management business. In December, 2015 SF completed the acquisition of Barclays U.S. asset management business.  All of this activity increased asset management fees in the last year by almost 30%, although overall earnings were down because of costs related to acquisitions.  The company claims that they facing better earnings as extraordinary costs are behind them.

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This issue begins trading on the OTC Grey market under ticker STIFP.  For those not familiar with buying shares on the OTC Grey market our Grey Market primer is here.

Aditional details on this new issue can be found here.

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