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Published on 2/13/2020 in the Prospect News Preferred Stock Daily.

Dynex Capital prices; CloudCommerce on tap; AT&T preferreds under par

By James McCandless

San Antonio, Feb. 13 – The Thursday preferred session was a mixed bag, focusing on newer issuance.

In the afternoon, Dynex Capital, Inc. priced a $100 million offering of $25-par series C fixed-to-floating rate cumulative redeemable preferred stock at par with an initial dividend of 6.9%.

Also, CloudCommerce, Inc. announced plans to price an offering of up to $20 million series F preferred stock with a dividend of 10%.

Secondary trading saw telecom company AT&T, Inc.’s new $1.75 billion 4.75% series C perpetual preferred stock finish under par on its first day.

The company’s 5% series A cumulative perpetual preferred stock also saw attention but went unchanged.

Meanwhile, REIT AGNC Investment Corp.’s 6.125% series F fixed-to-floating rate cumulative redeemable preferred stock also experienced rigidity.

Sector peer New Residential Investment Corp.’s new 6.375% series C fixed-to-floating rate cumulative redeemable preferreds declined.

Elsewhere, in the finance space, Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock inched higher.

Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferred stock ended flat, erasing any gains made during the session.

Dynex prices

In afternoon primary activity, Dynex Capital priced a $100 million offering of $25-par series C fixed-to-floating rate cumulative redeemable preferred stock at par with an initial dividend of 6.9%.

There is a $15 million greenshoe.

The deal was announced Thursday morning.

J.P. Morgan Securities LLC, RBC Capital Markets LLC and Keefe, Bruyette & Woods, Inc. are the joint bookrunners.

The dividend is fixed until April 15, 2025, then converts to a floating rate of Libor plus 546.1 bps.

The preferreds are redeemable on or after April 15, 2025. Prior to that, the preferreds are redeemable within 120 days after a change of control at par.

CloudCommerce on tap

Late in the day in primary activity, CloudCommerce announced plans to price an offering of up to $20 million series F preferred stock with a dividend of 10%.

Dalmore Group, LLC is the broker-dealer.

Dividends will be payable monthly.

The preferreds are redeemable after one year.

AT&T below par

Secondary trading saw telecom company AT&T’s new $1.75 billion 4.75% series C perpetual preferred stock finish under par on its first day.

The preferreds, trading under the temporary symbol “ATTXL,” closed at $24.95 on volume of about 18.3 million shares.

The company’s established 5% series A cumulative perpetual preferred stock also saw attention but went unchanged by the close.

The preferreds (NYSE:TPrA) ended level at $25.97 on volume of about 849,000 shares.

On Wednesday, the preferreds sunk 43 cents.

AGNC rigid

Meanwhile, real estate investment trust AGNC’s 6.125% series F fixed-to-floating rate cumulative redeemable preferred stock also experienced rigidity.

The preferreds (Nasdaq: AGNCP) finished where it started at $24.89 with about 915,000 shares trading.

On Wednesday, the preferreds declined by 4 cents.

Sector peer New Residential’s new 6.375% series C fixed-to-floating rate cumulative redeemable preferreds declined.

The preferreds, trading under the temporary symbol “NRESP,” fell 7 cents to close at $24.83 on volume of about 831,000 shares.

On Wednesday, its first day, the preferreds closed below par.

Capital One up

Elsewhere, in the finance space, Capital One’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock inched higher.

The preferreds (NYSE: COFPrJ) tacked on 1 cent to close at $24.96 with about 525,000 shares trading.

On Wednesday, the preferreds lost 5 cents.

Wells Fargo’s 4.75% series Z non-cumulative perpetual class A preferred stock ended flat, erasing any gains made during the session.

The preferreds (NYSE: WFCPrZ) remained level at $25.47 on volume of about 435,000 shares trading.

On Wednesday, the preferreds shaved off 8 cents.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index closed the day up by 0.10%, improving on the 0.08% rise from early Thursday trading.

The iShares US Preferred Stock ETF was down 3 cents to $38.20.


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