tut666

When Preferreds Aren't Preferred

I agree, for a %5 haircut they lowered confidence in whole pfd market. If they change it (and it would be a nominal dollar change) the market for these shares would rally huge and banks would have an avenue to raise capital which is what they want. Somebody call Geitner! P.S the Trus preferreds are way undervalued in teh whole banking system but especially so in C case. They obviously recognized that 3.25 per share times 7.307 was less than what trust preferreds would have had to get which is why they only took the lesser ones. Huge opportunity to buy them for great yield with now increased equity value below them in equity structure. Where elae can you get almost a govt. too big to fail guarantee with 20% yield.The worst case is you would get a better swap then the non trust prefferreds.