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Foreign Bank Preferreds
Old 12-23-2007, 12:37 PM   #1
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Foreign Bank Preferreds

Has anyone been looking/buying at these lately?

OK, so I bought some Friday -- the preferred stocks of Royal Bank of Scotland, Deutsche Bank, and ING groep. THey have current yields of between 7.8 and 8%, and yields to call of about 12%. They all qualify for the 15% dividend taax rate.

Now i'm second guessing myself. I suppose none of these will go bankrupt, which would be the only reason for them to suspend payment. And the yields are tempting. But I've already taken a bath on regular domestic bank stocks this year, and wonder if i've set myself up for another one.....


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Old 12-23-2007, 01:29 PM   #2
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There's a new ETF that specializes in this stuff if you want a little diversification protection: PGF.

But we live in interesting times. Housing bubbles in the US, UK, and Oz. Very nervous lenders and investors. Fun read here:

Crisis may make 1929 look a 'walk in the park' - Telegraph

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Old 12-23-2007, 01:52 PM   #3
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Hmm. Nicely written article. Thanks for the link.

The next few months will indeed be interesting. I suspect there will be better bargains yet in this asset class, and intend to try and keep some powder dry....I always tend to buy too early on the way down.

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Old 12-30-2007, 07:36 PM   #4
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We have been buying a lot of these. Especially Barclays and Aegon.
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Old 01-02-2008, 01:43 PM   #5
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Hi Saluki--

Yes, I've been looking at Barclays too. But the yield isn't quite as tempting, especially when you look at the common stock...I'm hoping that the BCS preferred comes down a bit.

Today, that looks a bit unlikely -- a large move up in all these securities

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