Regional Banker Banc of California Sells a 7% Preferred Issue
By: Tim McPartland,
Banc of California (NYSE:BANC) has sold a new preferred stock offering whose shares now are trading on the OTC Grey Market under temporary ticker BNNCP.
As a banking company, Banc of California’s new issue is required to be non-cumulative, so if dividends are not declared they are gone forever. In addition, the issue is NOT investment grade and the shares are perpetual and thereby have no maturity date.
The issue has a normal five-year optional redemption that allows the company to redeem the shares at its discretion as early as March 15, 2021. Typically, the issuer will redeem the shares in what we call a “refinancing” transaction on the optional redemption date, if it can issue new shares at a coupon at least ¼-½% below the coupon on the just-issued shares.
Complete details of the issue can be found here.
To compare this issue with other Banc of California preferred issues outstanding, you can easily check them on our “swaps” page. The company has two other issues outstanding.
For those who are interested in buying on the OTC Grey Market, check out our “primer” to understand the process.