Post-holiday preferreds mixed; Fortress Biotech, Goldman Sachs, American Equity offer deals

By Cristal Cody

Tupelo, Miss., Nov. 12 – Preferred stock indexes ended Tuesday moderately better with several issuers announcing deals.

The Wells Fargo Hybrid and Preferred Securities index was up 0.1% over the morning and closed the day 0.22% better.

The U.S. iShares Preferred Stock ETF rose 10 cents or 0.29%, early Tuesday and ended the session up 11 cents, or 0.3%, at $37.07.

In the primary market, Fortress Biotech, Inc. announced plans to price a registered add-on to its 9.375% $25-par series A perpetual preferred stock.

The preferreds, traded under the symbol “FBIOP” on the Nasdaq Capital Market, closed the day down 15 cents, or 0.73%, at $20.89 on trading volume of about 5,000 shares.

At the start of the day, the Fortress Biotech preferreds fell 6 cents.

The securities were last reported on Monday at $21.04 a share.

Meanwhile, Goldman Sachs Group Inc. launched an offering of depositary shares on Tuesday.

Also, American Equity Investment Life Holding Co. marketed a registered offering of $25-par depositary shares.

In the secondary market, preferred stocks were trending softer.

Allstate Corp.’s 4.75% series I fixed-rate non-cumulative perpetual preferred stock closed down 4 cents, or 0.16%, at $24.78.

The preferreds, traded under the temporary symbol “ASTLZ”, saw trading volume of about 299,000 shares.

Allstate sold $300 million of the $25-par preferreds (Baa2/BBB) at par on Nov. 4.

The preferreds are expected to be listed on the New York Stock Exchange under the symbol “ALLPrI.”

In other new-issue trading, CIT Group Inc.’s new $200 million 5.625% series B non-cumulative perpetual preferred stock closed flat at $25.05 on strong trading volume of about 1.2 million shares. The preferreds, traded under the temporary symbol “CITUP”, were priced on Nov. 7.

Synchrony Financial’s new 5.625% series A non-cumulative perpetual preferred stock softened 2 cents, or 0.08%, to $25.10 over the day on trading volume of about 404,000 shares. The preferreds are traded under the temporary symbol “SNFI”.

Synchrony Financial sold $750 million of the $25-par preferreds on Nov. 6.

Elsewhere in the finance space on Tuesday, JPMorgan Chase & Co.’s 6.125% series Y non-cumulative preferreds (NYSE: JPMPrF) ended unchanged on the day. The preferreds closed at $25.28 on trading volume of about 82,000 shares.

Fortess Biotech offers add-on

Fortress Biotech plans to price an add-on to its 9.375% $25-par series A perpetual preferred stock, according to a 424B5 filing with the Securities and Exchange Commission on Tuesday.

The Benchmark Co. and ThinkEquity are the bookrunners.

The securities will have the same terms as the 1,039,292 currently outstanding shares of the series A preferred stock.

Fortress Biotech originally issued the preferreds in a $25 million offering at par on Nov. 14, 2017 and registered to sell up to $26 million more of the shares on April 5, 2018 at the same terms.

The biopharmaceutical company is based in New York.

Goldman Sachs launches

Goldman Sachs Group launched an offering of depositary shares on Tuesday, according to a 424B2 filing.

The shares each represent 1/25 of an interest in a share of series R perpetual fixed-rate reset non-cumulative preferred stock.

Dividends will accrue from the issue date to but excluding Feb. 10, 2025 at a fixed rate and will be reset thereafter.

Goldman Sachs & Co. is the bookrunner.

The securities will not be listed on an exchange.

Goldman Sachs Group is a New York-based banking, securities and investment management company.

American Equity plans deal

American Equity Investment Life Holding also marketed a registered offering of $25-par depositary shares on Tuesday, according to a 424B5 filing.

The shares each represent 1/1,000th of an interest in a share of series A perpetual fixed-rate reset non-cumulative preferred stock.

Dividends will accrue from the issue date to but excluding Dec. 1, 2024 at a fixed rate and will be reset thereafter.

Morgan Stanley & Co. LLC, BofA Securities, Inc., Wells Fargo Securities LLC and RBC Capital Markets, LLC are the bookrunners.

American Equity Investment plans to apply to list the depositary shares on the New York Stock Exchange under the symbol, “AELPRA.”

West Des Moines, Iowa-based American Equity Investment issues fixed index and fixed-rate annuities.

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