Zions Bancorporation Tenders Early for Fixed to Floating Shares

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I guess Zions Bancorpation doesn’t want future uncertainty in their preferred shares as they have made a tender for 3 different series of fixed to floating preferred shares.  2 of these issues are $1000/share issues which we do not follow, but 1 issue is a $25/share issue (ZB-G) which is a 6.3% fixed issue which turns into a floating issue in 2023.  The 2 $1000 issues have current fixed rates of 5.8% and 6.95%. 

Zion is paying a premium to holders of the $25.00–$26.10 plus accrued dividends–the issue has been trading around $26.  It would not surprise us a bit if others do the same as Zion if interest rates continue to trade lower.  If a company thinks rates will be down low for 3, 4 or 5 years there is nothing to stop them from tendering for whatever shares they can get thereby saving money in the long term.

Holders are not required to tender their shares and in fact Zion is tendering for just $180,000,000 in shares and there are a total of about $670,000,000 outstanding.



Tim McPartland

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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.
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