Hilltop Holdings Inc . (NYSE:HTH), a financial services firm with a market capitalization of $1.87 billion, through its indirect wholly owned subsidiary Hilltop Securities Inc., has launched a new commercial paper program, according to a recent SEC filing. According to InvestingPro data, the company maintains a FAIR financial health score, with particularly strong cash flow metrics. The program, which commenced on Monday, allows for the issuance of up to $300 million in senior secured commercial paper notes, known as Series 2024-1 CP Notes.
The Series 2024-1 CP Notes will be sold at a discount and will not bear interest, with maturities ranging from 14 to 270 days from the date of issuance. These notes will be secured by collateral owned by Hilltop Securities and are on par with other senior indebtedness of the firm. The company's current debt-to-equity ratio stands at 1.13, reflecting its leveraged position in the financial services sector. The proceeds from the sale of the notes will be used for general corporate purposes, including working capital.
The notes will be offered only to qualified investors who meet the criteria outlined in the Indenture, a legal agreement between Hilltop Securities and The Bank of New York Mellon (NYSE:BK), which serves as the indenture trustee, securities intermediary, issuing agent, and paying agent for the notes. The notes will be issued through The Depository Trust Company's book-entry system, with a minimum denomination of $100,000 and increments of $1,000.
In addition to the newly issued Series 2024-1 CP Notes, Hilltop Securities has $175 million outstanding in Series 2019-1 Senior Secured Commercial Paper Notes and $34 million in Series 2019-2 Senior Secured Commercial Paper Notes, with a cap of $200 million for the latter. The collateral securing each series of notes is separate and not cross-collateralized.
With its upcoming earnings report due on January 30, investors should note that InvestingPro subscribers have access to additional insights, including 8 more ProTips and comprehensive financial analysis. The company currently offers a 2.37% dividend yield and has maintained dividend payments for 9 consecutive years, though analysts expect net income to decrease this year.
In other recent news, Hilltop Holdings Inc. has reported mixed Q3 results. The company announced a net income of approximately $30 million, or $0.46 per diluted share, with PlainsCapital Bank contributing a pre-tax income of $48 million. However, PrimeLending faced a pre-tax loss due to a drop in origination volume and a valuation adjustment, while Hilltop Securities generated $17 million in pre-tax income on $124 million in net revenues. These developments follow the company's decision to redeem all its outstanding 5.00% Senior Notes due 2025, with a principal amount of $150 million.
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