New Equity and Exchange Traded Debt IPOs August 2024

New offer summaries:

Angel Oak Mortgage REIT (AOMR) has priced a $50 million offering of new exchange-traded senior notes due 2029 offering a fixed coupon of 9.5%. The new notes, which can be redeemed by the company at par, beginning July 30, 2026, will provide financing for the company’s acquisition of residential mortgage investments, as well as potential common stock repurchases. The new notes trade on the Nasdaq under the symbol AOMN, where they were changing hands slightly below par at the time of writing.

Valley National Bancorp (VLY) has established a $150 million offering of Series C non-cumulative perpetual preferred stock, offering an initial dividend rate of 8.25% until September 30, 2029, at which time the company may repurchase optional shares; if not redeemed, at which time the dividend rate will begin to reset according to a schedule every five years, with the new rate at each reset adjusted to match the current five-year Treasury rate, plus a spread of 4.182%. Credit ratings BB-, BBBL and BBB- were assigned by S&P, DBRS and Kroll bond rating agency, respectively. The new stock temporarily traded on the OTC under the symbol VLYNP before switching to the permanent symbol VLYPN, where it now trades on the Nasdaq.

Chimera Investment Corporation (CIM) has established a $65 million offering of new senior notes due 2029, offering a fixed coupon of 9.25%. The new notes, which may be redeemed early by the company beginning on August 15, 2026, have been assigned a BBB credit rating by Egan-Jones Ratings Company. The new notes trade on the New York Stock Exchange under the symbol CIMO, where they last changed hands at about $25.30 at the time of writing.

SEC filings for additional information: AOMN, VLYPN, CIMO

Buying new stock for wholesale

Preferred stock IPOs often involve a temporary period in which OTC trading symbols are assigned until these securities move to their retail exchange, at which time they will receive their permanent symbols. For example, the new preferred Valley National Bancorp discussed above, which initially trades under the symbol VLYNP on the OTC:

Individual investors armed with a web browser and an online trading account can often purchase newly introduced preferred stocks at wholesale prices just like the big boys (see “Buyers of preferred stock are changing tactics for double-digit returns” for an explanation of how OTC can be used to buy stocks at discounted prices).

Those who have followed this strategy of using the wholesale OTC exchange to buy newly introduced stocks as close to $25 (or less) are better able to avoid a capital loss if prices fall (if they choose to sell). Note that in the case of the new preferred Valley National Bancorp, on 8/2/2024 shares were changing hands around $24.48; at the time of writing, VLYPN was trading at $25.30.

Your broker will automatically update the trading symbols of any stocks you buy on the OTC once they switch to their permanent symbols. A special note about preferred stock trading symbols: Annoyingly, unlike regular stock trading symbols, the format used by exchanges, brokers and other online quotation services for preferred stock symbols is not standardized.

For example, a particular Series A preferred stock might have a symbol ending in “-A” at TD Ameritrade, Google Finance, and a few others, but the same stock might end in “PR.A” at E*Trade and “.PA” at Caut Alfa. For a cross-reference table of how preferred stock symbols are designated by sixteen popular brokers and other online quote services, see “Preferred Stock Trading Symbols Cross Reference Table.”

Previous preferred stock IPOs under para

In addition to covering new preferred stock and ETD deals, here at CDx3 we also track past deals, with alerts when securities fall below par. We’ve seen many such crossovers to date, with the CDx3-compatible “basket” trading at about a 2% discount as of this writing. However, in August the basket is near YTD highs and our internal “bargain count” is near YTD lows:

We track when various preferred stocks and exchange-traded debt become available below par in market trading, and to wrap up this article, we’d like to share with you some of the latest dips/crossovers below par that we’ve seen in row of individual securities (note that entries highlighted in yellow indicate securities with high ratings eligible for the “CDx3 Bargain Table”):

For those investors in preferred stocks (and ETDs) interested not only in new IPOs, but also in previously issued securities, the following equal crosses can provide useful insight into securities that have recently become available on the market below their initial offering prices .

Investor Takeaway

In our monthly Seeking Alpha articles, we here at CDx3 Notification Service typically summarize all of the new preferred stock and exchange-traded debt offerings seen throughout the month; we also highlight previous offers that started trading below par. Our goal is to keep fixed income investors informed about the various investments available in today’s market, and we hope this month’s article served that purpose. See you next time and thanks for reading!