Preferred stocks begin week with firm tone; JPMorgan’s new issue lists on NYSE; Schwab up

By Stephanie N. Rotondo

Phoenix, Aug. 10 – Preferred stocks were following the positive broad market trend in Monday trading.

The Wells Fargo Hybrid and Preferred Securities index ended up 16 basis points, or 4 cents on average for $25-par paper. The index was up 5 bps at mid-morning.

The gains came amid an oil rally and comments from Federal Reserve members touting a recovering economy and the probability of a September interest rate hike.

Though the market was firm, a trader noted that overall liquidity remained constrained.

Among recent deals, JPMorgan Chase & Co.’s $1.1 billion of 6.15% series BB noncumulative perpetual preferreds were admitted to the New York Stock Exchange as the session opened.

The ticker symbol is “JPMPH.” The deal came July 22 via J.P. Morgan Securities LLC.

The issue was the day’s most actively traded security, closing at $24.99. That compared to opening levels of $24.95.

A trader quoted the issue at $24.96 bid, $24.98 offered early in the session.

Meanwhile, the Charles Schwab Corp.’s $600 million of 6% series C noncumulative preferreds (NYSE: SCHWPC) – a deal priced July 27 – were also on the active side, ending up a penny at $25.26.

From last week’s business, Global Indemnity plc’s $100 million of 7.75% $25-par subordinated notes due 2045 were pegged at $24.80 bid, $24.82 offered.

That issue came Wednesday from Morgan Stanley & Co. LLC and UBS Securities LLC. A trader noted that the notes had not yet been assigned a temporary trading symbol.

For the week ahead, a trader said he had not yet heard of any deals in the works but added that he would “not be surprised” if something got done.

He noted that several companies filed mixed shelf registrations last week and that rumors of a September interest rate hike could spur some potential issuers to act.

National General offers notes

National General Holdings Corp., a New York-based insurance company, announced late in the day that it was selling $25-par subordinated notes due 2055.

The notes offering is being done concurrently with a common stock offering.

The company’s existing 7.5% series B noncumulative perpetual preferreds (Nasdaq: NGHCO) closed up 12 cents at $25.20.

Morgan Stanley, UBS Securities and Keefe Bruyette & Woods Inc. are leading the notes offering. JMP Securities LLC is the co-manager.

The new securities will be listed on the Nasdaq Global Select market under the ticker symbol “NGHCZ.”

Proceeds from the combined offerings will be used for general corporate purposes, including strategic acquisitions and supporting its current and future policy writings.

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