Morgan Stanley Sells a Fixed to Floating Rate Preferred

By: ,

Morgan Stanley has sold a fixed to floating rate non cumulative preferred issue.  The coupon on the issue is 6.375% which remains fixed until 2024 and then the rate changes to a floating rate which is a 3 month libor based rate.

Fixed to floating rate preferreds may have benefits as interest rates move higher, but you give up some yield during the first 10 years (there is always a trade off) as compared to a like rated fixed rate issue.

As has been normal lately we have no interest because of the non cumulative and perpetual features of this issue.  Recall that we are tryig to shorten duration of the portfolio as we stare into the teeth of potentially higher interest rates.


This issue started trading yesterday on the OTC

Details of this issue are here.

Tim McPartland

Connect with Tim McPartland

Tim McPartland
Tim McPartland is a private investor with over 45 years of investing experience. His analysis, research and writing is devoted to the hunt for income producing securities of all types, but in particular specializing in preferred stocks, exchange traded debt and Master Limited Partnerships.
Search Dividend Investor