Enstar sells $1,000-par notes; U.S. Bancorp preferreds jump; Farmer Mac better

By James McCandless

San Antonio, Aug. 19 – The preferred market concluded the Wednesday session with top traders being pulled in different directions.

In the primary market, Enstar Finance LLC price a $350 million offering of $1,000-par 20-year fixed-rate reset junior subordinated notes with an initial coupon of 5¾%.

Leading the secondary, U.S. Bancorp’s series B floating-rate non-cumulative perpetual preferred stock jumped.

Elsewhere in the finance space, Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferred stock rose while its 6.625% series R fixed-to-floating rate non-cumulative perpetual class A preferreds declined.

Sector peer Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock also lost ground.

Rural lender Federal Agricultural Mortgage Corp.’s new 5.25% series F non-cumulative perpetual preferred stock spent the day improving.

Meanwhile, telecom giant AT&T, Inc.’s 4.75% series C perpetual preferred stock ended the afternoon with a gain.

Enstar prices

The primary saw Enstar price a $350 million offering of $1,000-par 20-year fixed-rate reset junior subordinated notes (BB+/BB+) with an initial coupon of 5¾%.

Enstar Group Ltd. will guarantee the notes on a junior subordinated basis.

Wells Fargo Securities, LLC, Barclays, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, ING Financial Markets LLC, nabSecurities, LLC, Scotia Capital (USA) Inc. and Truist Securities, Inc. are the bookrunners.

The coupon resets on Sept. 1, 2025 and every five years thereafter at the Treasury rate plus 546.8 basis points.

The notes are redeemable within six months of each reset date at par. The notes are also redeemable after a change in law at par, a tax event at par, or after a rating agency event at 102.

U.S. Bancorp jumps

Leading the secondary space, U.S. Bancorp’s series B floating-rate non-cumulative perpetual preferred stock jumped upward.

The preferreds (NYSE: USBPrH) shot up 79 cents to close at $22.97 on volume of about 1.7 million shares.

Elsewhere in the finance space, Wells Fargo’s 4.75% series Z non-cumulative perpetual class A preferred stock rose while its 6.625% series R fixed-to-floating rate non-cumulative perpetual class A preferreds ended on a decline.

The series Z preferreds (NYSE: WFCPrZ) tacked on 2 cents to close at $24.95 with about 404,000 shares trading.

The series R preferreds (NYSE: WFCPrR) dropped 8 cents to close at $27.68 with about 328,000 shares trading.

Sector peer Capital One’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock also lost some ground.

The preferreds (NYSE: COFPrJ) were docked 5 cents to close at $23.89 on volume of about 298,000 shares.

On Tuesday, the preferreds picked up 28 cents.

Farmer Mac loses

Rural lender Farmer Mac’s new 5.25% series F non-cumulative perpetual preferred stock spent the day improving.

The preferreds, trading under the temporary symbol “AGMFP,” gained 8 cents to close at $25.65 with about 272,000 shares trading.

On Tuesday, the preferreds garnered 39 cents.

AT&T gains

Meanwhile, telecom giant AT&T’s 4.75% series C perpetual preferred stock ended the afternoon with a gain.

The preferreds (NYSE: TPrC) were lifted 5 cents to close at $25.40 on volume of about 204,000 shares.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index capped the day down by 0.03%, better than a 0.11% slip in early Wednesday trading.

The iShares US Preferred Stock ETF was up 4 cents to $36.60.

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