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A Look at the Goldman Sachs Preferred Stock Deal
These types of deals make good long-term investments.
Michael Sedacca    

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Goldman Sachs (NYSE:GS) is shopping two preferred stock deals today: a perpetual 6.5% with a 10-year call (Series K) and a perpetual 6% with a five-year call (Series L) at $750 million and $500 million sizes, respectively. Goldman's outstanding floating and fixed preferreds trade at yields between 6.35% and 6.45%, so the first deal is coming in a little cheap.

The similar Wells Fargo (NYSE:WFC) deal that was sold last week ended up pricing 25 basis points inside of its initial guidance.

These really seem like the kind of deals to be picking up to stick in the drawer for the rest of the year if you think the S&P 500 (INDEXSP:.INX) trades in a 7% to 10% range and ends up close to where it started. As a fun fact and history lesson on how bank credit risk and interest rate risk are priced today, the Goldman Sachs Series B preferred stock issued in October 2005 (with a five-year call) came at 183 basis points over five-year Treasuries. If the five-year callable preferred stock being shopped today were to price at 6%, that would be 429 basis points over the five-year Treasury.

Author's note: In the final pricing announced this afternoon, Goldman Sachs launched the Series K at 6.375% and the Series L at 5.7%.

Twitter: @MichaelSedacca
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

A Look at the Goldman Sachs Preferred Stock Deal
These types of deals make good long-term investments.
Michael Sedacca    

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Goldman Sachs (NYSE:GS) is shopping two preferred stock deals today: a perpetual 6.5% with a 10-year call (Series K) and a perpetual 6% with a five-year call (Series L) at $750 million and $500 million sizes, respectively. Goldman's outstanding floating and fixed preferreds trade at yields between 6.35% and 6.45%, so the first deal is coming in a little cheap.

The similar Wells Fargo (NYSE:WFC) deal that was sold last week ended up pricing 25 basis points inside of its initial guidance.

These really seem like the kind of deals to be picking up to stick in the drawer for the rest of the year if you think the S&P 500 (INDEXSP:.INX) trades in a 7% to 10% range and ends up close to where it started. As a fun fact and history lesson on how bank credit risk and interest rate risk are priced today, the Goldman Sachs Series B preferred stock issued in October 2005 (with a five-year call) came at 183 basis points over five-year Treasuries. If the five-year callable preferred stock being shopped today were to price at 6%, that would be 429 basis points over the five-year Treasury.

Author's note: In the final pricing announced this afternoon, Goldman Sachs launched the Series K at 6.375% and the Series L at 5.7%.

Twitter: @MichaelSedacca
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

A Look at the Goldman Sachs Preferred Stock Deal
These types of deals make good long-term investments.
Michael Sedacca    

This article was originally posted on the Buzz & Banter, where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Goldman Sachs (NYSE:GS) is shopping two preferred stock deals today: a perpetual 6.5% with a 10-year call (Series K) and a perpetual 6% with a five-year call (Series L) at $750 million and $500 million sizes, respectively. Goldman's outstanding floating and fixed preferreds trade at yields between 6.35% and 6.45%, so the first deal is coming in a little cheap.

The similar Wells Fargo (NYSE:WFC) deal that was sold last week ended up pricing 25 basis points inside of its initial guidance.

These really seem like the kind of deals to be picking up to stick in the drawer for the rest of the year if you think the S&P 500 (INDEXSP:.INX) trades in a 7% to 10% range and ends up close to where it started. As a fun fact and history lesson on how bank credit risk and interest rate risk are priced today, the Goldman Sachs Series B preferred stock issued in October 2005 (with a five-year call) came at 183 basis points over five-year Treasuries. If the five-year callable preferred stock being shopped today were to price at 6%, that would be 429 basis points over the five-year Treasury.

Author's note: In the final pricing announced this afternoon, Goldman Sachs launched the Series K at 6.375% and the Series L at 5.7%.

Twitter: @MichaelSedacca
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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