Zions Bancorporation N.A.'s Series A preferred stock, trading under the ticker ZIONP, has carried a call option since December 15, 2011. Fifteen years later, the bank still hasn't exercised it. The $25-par, 4% non-cumulative perpetual preferred last changed hands at $17.70, according to market data, putting it roughly 29.2% below its liquidation preference: a gap that has persisted even as the security's coupon structure references a benchmark, LIBOR, that stopped being published for most purposes in mid-2023.
That combination (a long-callable preferred still outstanding, priced well under par, with a floating-rate mechanism tied to a retired index) is the kind of structural oddity that first stood out in data tracked on Preferred Stock AI, a Madison Labs research site. The security's terms specify a rate equal to the greater of three-month LIBOR plus 0.520% or a 4.00% floor, a formula written into the 2006 prospectus when Zions issued 9.6 million shares. The current annualized dividend of roughly $1.28 per share, above the $1.00 floor implied by the stated 4% coupon on a $25 par, indicates the floating leg has been paying out above the floor in recent periods, based on the dividend history disclosed alongside the security.
For income-focused investors, the persistence of a callable-but-uncalled preferred raises a straightforward question: why would an issuer leave in place a security it has had the legal right to redeem for a decade and a half? Bank preferred stock generally gets called when refinancing at a lower all-in cost becomes attractive, or when regulatory capital treatment changes enough to reduce the value of keeping an older instrument outstanding. Neither appears to have compelled Zions to act on ZIONP. Because the shares trade below the $25 redemption price, calling the issue would require the bank to pay holders more than the security's current market value: an added cost that, absent other drivers, works against redemption from the issuer's perspective.
The discount to par matters directly to anyone holding or evaluating the shares. A preferred priced at $17.70 against a $25 liquidation preference implies a current yield of 7.24%, well above the security's stated 4% coupon rate, simply because the fixed dividend is being measured against a market price far under face value. That yield figure reflects price movement, not a change in the underlying payout terms, and it comes with the standard risks of non-cumulative preferred stock: if Zions ever suspended the dividend, holders would have no right to back payments, unlike cumulative preferred structures.
Zions issued the Series A shares in December 2006, ahead of the 2008 financial crisis and the subsequent wave of bank capital raises and preferred redemptions that followed Basel III implementation. Many bank preferreds from that era were called as regulatory capital rules evolved and issuers found cheaper replacement funding; ZIONP's continued existence on the market, alongside its 52-week range of $17.70 to $23.40, sets it apart from peers that were retired. The LIBOR reference itself is a relic of that same period: U.S. dollar LIBOR panels ceased publication in mid-2023 under actions tied to the LIBOR Act and related regulatory transition work, with legacy contracts generally moving to SOFR-based successor rates plus adjustment spreads unless otherwise specified.
The broader market backdrop offers some context for how preferred and bank-related securities are trading currently. Wells Fargo & Company shares were up 2.6% on the day, part of a mixed session for financials, while Zions' common stock, ZION, has drawn recent attention from institutional filers, including disclosed positions from Headlands Technologies, Infrastructure Capital Advisors, Meeder Asset Management, and Focus Partners Advisor Solutions, according to filings reported by financial media outlets. None of that activity speaks directly to ZIONP's call status, but it underscores that Zions remains an actively covered name across both its equity and preferred capital structure.
Investors watching ZIONP going forward have a narrow set of catalysts to track: any statement from Zions regarding capital management or preferred redemptions, shifts in short-term interest rates that would affect the floating-rate calculation now referencing a SOFR-based successor, and the stock's ongoing discount to its $25 par value. The security's quarterly, non-cumulative dividend and its long-dormant call option mean its price behavior will likely continue to be shaped more by rate expectations and issuer discretion than by any fixed maturity date, since the shares carry no maturity and remain perpetual unless redeemed.