February 27, 2017
We are buying CUBI-F (CUBIPRF at Fidelity) a preferred from Customers Bancorp….a publicly traded bank holding company based in Pennsylvania. The 6% issue just went ex-dividend and this is a good time to purchase.
It offers a floating rate which protects investors against interest rate risk.
In December 2021 the distribution rate shifts to floating rate at LIBOR+4.76% which would be in the 6% yield range. We have been buying positions in the Core Portfolio in anticipation of rising rates, and this is an addition to this list.
We are generally AVOIDING run-of-the-mill preferred stocks BUT the CUBI-F potential shift to a floating rate makes this a good buy right now.