Ncc-pf

charlie · 08-01-2008, 02:19 PM

Hi to all,

I recently sold my modest position in KRE (Regional Banking Index) and
bought National City Corp preferred series F. This stock pays 9.875%
fixed rate until 2/1/2013 when it switches to 3 month LIBOR plus
6.33%. The stock has no maturity date and first call is 2/1/2013 at $25.
It was rated BBB+ on 2/08/2008. The market price is around $22 which
makes the current yield about 11.2%. The yield to call would be roughly
about 14%.

This looked like a sweet deal to me as it beats my equity return goal
of at least 10% with bond like risk.

I would appreciate any comments you care to make .... especially from
Brew. I would like to buy more if the consensusl is favorable.

Cheers,

charlie

**bssc** · 08-01-2008, 02:52 PM

I own NCC stock. It is highly speculative position. I suspect that the high return on the preferred stock reflects the feeling that they are undercapitalized so you are assuming a higher risk.

clifp · 08-01-2008, 05:30 PM

I have been writing NCC options recently (to take advantage of the tremendous volatility) and a few years ago owned the stock briefly.

Charlie as I am sure you know there is a real chance that NCC might fail, if the Ohio real estate market continues to worsen. I'd be interested in Brewer's comments also, but I think it would be worth while to look at Country Wide and IndyMac bonds and preferred to get an idea what your stock maybe worth in the event NCC goes under.

I've been looking at a similar security from a far more secure bank. JP Morgan (JPM-Z) preferred 8% coupon until 2013 than switches to 3 month LIBOR + 4.12% it is currently trading a bit over par ~$26, so current yield is around 7.7% Obviously a big difference in current yield and YTM. If the credit market returns to normal the NCC preferred has 220 basis advantage on the other hand I prefer JP Morgan's balance sheet to NCC's

**REWahoo** · 08-01-2008, 05:32 PM

Quote:

Originally Posted by clifp

volatility
IndyMac

Libor

NCC's

My we are colorful today, aren't we?

EDIT: On second thought, maybe not...

clifp · 08-01-2008, 05:33 PM

Ya hit submit while in spell check mode

cute fuzzy bunny · 08-02-2008, 10:14 AM

I think what you're getting there is equity like returns with equity like risk Charlie.

08-01-2008, 02:19 PM	#1
charlie Thinks s/he gets paid by the post Join Date: Mar 2004 Location: Dallas Posts: 1,082	Ncc-pf Hi to all, I recently sold my modest position in KRE (Regional Banking Index) and bought National City Corp preferred series F. This stock pays 9.875% fixed rate until 2/1/2013 when it switches to 3 month LIBOR plus 6.33%. The stock has no maturity date and first call is 2/1/2013 at $25. It was rated BBB+ on 2/08/2008. The market price is around $22 which makes the current yield about 11.2%. The yield to call would be roughly about 14%. This looked like a sweet deal to me as it beats my equity return goal of at least 10% with bond like risk. I would appreciate any comments you care to make .... especially from Brew. I would like to buy more if the consensusl is favorable. Cheers, charlie Last edited by charlie; 08-01-2008 at 02:49 PM.. Reason: Corrected error

08-01-2008, 02:52 PM	#2
bssc Moderator Join Date: Dec 2005 Posts: 2,915	I own NCC stock. It is highly speculative position. I suspect that the high return on the preferred stock reflects the feeling that they are undercapitalized so you are assuming a higher risk. __________________ Angels danced on the day that you were born.

08-02-2008, 10:14 AM	#6
cute fuzzy bunny Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Dec 2003 Location: Losing my whump Posts: 22,527	I think what you're getting there is equity like returns with equity like risk Charlie. __________________ Many an optimist has become rich by buying out a pessimist

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08-01-2008, 05:30 PM	#3
clifp Thinks s/he gets paid by the post Join Date: Oct 2006 Posts: 2,338	I have been writing NCC options recently (to take advantage of the tremendous volatility) and a few years ago owned the stock briefly. Charlie as I am sure you know there is a real chance that NCC might fail, if the Ohio real estate market continues to worsen. I'd be interested in Brewer's comments also, but I think it would be worth while to look at Country Wide and IndyMac bonds and preferred to get an idea what your stock maybe worth in the event NCC goes under. I've been looking at a similar security from a far more secure bank. JP Morgan (JPM-Z) preferred 8% coupon until 2013 than switches to 3 month LIBOR + 4.12% it is currently trading a bit over par ~$26, so current yield is around 7.7% Obviously a big difference in current yield and YTM. If the credit market returns to normal the NCC preferred has 220 basis advantage on the other hand I prefer JP Morgan's balance sheet to NCC's

08-01-2008, 05:33 PM	#5
clifp Thinks s/he gets paid by the post Join Date: Oct 2006 Posts: 2,338	Ya hit submit while in spell check mode

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