IBERIABANK Corp Sells a Fixed to Floating Rate Preferred – Updated

UPDATE–OTC Grey Market ticker is IBRRP

Louisiana banker IBERIABANK Corp (NASDAQ:IBKC) has priced a new issue of preferred stock.  This issue is the fixed to floating rate variety, meaning they start with a fixed coupon rate of 6.60% and later (in this case 10 years) the coupon rate will float at a rate equaling 3 month libor plus 4.92%.

Competing fixed to floating rate issues have traded well in recent months and in fact IBKC has another fixed to floating rate issue outstanding with a coupon of 6.625% which is trading at $25.64. It is interesting that this older issue is the only $25 face traditional preferred stock that we are aware of that pays dividends twice yearly.  The new issue pays quarterly.

Being a bank this issue is non-cumulative, but the dividend payments are qualified for preferential tax treatment (taxed at the lower capital gain rate).

Details of the new IBERIABANK issue can be found here.

At this time the OTC Grey market ticker has not been announced, but we believe it will begin trading in the next 2 days on the grey market.  We will update this article when the OTC ticker is announced.  For those not familiar with OTC Grey market trading we have a short primer here.

We believe that over the course of the next month this issue should trade in the $25.50 to $25.70/share area so if one can pick it up at par or below one could garner a reasonable capital gain quite rapidly (no guarantees of course).