Preferreds gain; primary action quiet; B. Riley mixed; Wells Fargo 8% preferreds better

By Cristal Cody

Tupelo, Miss., Dec. 1 – Preferred stocks headed out better on Friday.

The Wells Fargo Hybrid and Preferred Securities index climbed 37 basis points.

The U.S. iShares Preferred Stock ETF jumped by 75 bps.

The primary market was quiet with recent new issues mixed in trading.

E*Trade Financial Corp.’s issue of 5.3% series B fixed-to-floating rate non-cumulative perpetual preferred shares that priced on Monday was done in the $1,000 par side of the market but “has performed quite well,” a source said.

E*Trade priced $300 million of the preferreds, which consisted of 300,000 depositary shares that each represent 1/100th of a share of the series B preferreds. The depositary shares have a liquidation preference of $1,000 per share.

The preferreds have a fixed rate to but excluding March 15, 2023. Thereafter, the rate will convert to a floating rate of Libor plus 316 bps.

E*Trade, a New York City-based financial services company that provides online brokerage and related products and services, plans to use the proceeds to fund its acquisition of Trust Company of America, Inc. and for general corporate purposes.

B. Riley trades

B. Riley Financial Inc.’s two issues of $25-par senior notes it plans to reopen were mixed in trading on Friday.

The company announced on Thursday it is offering up to $40 million of its 7.5% $25-par senior notes due Oct. 31, 2021 and 7.5% $25-par senior notes due May 31, 2027.

B. Riley’s 7.5% notes due 2021, which trade on Nasdaq under the symbol “RILYL,” fell 8 cents to $26.02 on Friday.

The company’s 2027 notes, traded on the Nasdaq under the symbol “RILYZ,” improved 9 cents to $25.80.

In other trading, Wells Fargo & Co.’s 8% series J non-cumulative perpetual class A preferred shares (NYSE: WFCPrJ) closed up 2 cents to $25.62.

The preferred shares are not expected to be called at the first optional call date on Dec. 15, according to market sources.

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