Morning Commentary: American Express bringing new $1,000-par issue; JPMorgan rises above par

By Stephanie N. Rotondo

Phoenix, Feb. 25 – It was starting out as another firm day for the preferred stock market on Wednesday.

The Wells Fargo Hybrid and Preferred Securities index was up 13 basis points at mid-morning.

The day also brought a new issue from American Express Co., as the New York-based company said it was selling $1,000-par series C fixed-to-floating rate noncumulative preferreds.

Price talk is 5.25%, according to a trader.

Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets and Wells Fargo Securities LLC are running the books.

The new deal announcement came as the company said it was raising interest rates on more than 1 million of its cardholders. On average, cardholders will see an increase of 2.5%, raising the rates to at least 12.99%.

AmEx said that the increase was due to a review it did of its rates compared to its rivals on cardholders having “similar credit profiles,” in which it found its own rates were below competitors.

Additionally, the company also has reportedly lost its 16-year partnership with Costco, after having recently lost its contract with JetBlue.

Merchants have been nixing the card, as it costs more to take than other cards, like Visa or MasterCard.

Meanwhile, JPMorgan Chase & Co.’s $1.38 billion of 6.125% series Y noncumulative preferreds (NYSE: JPMPF) were “finally trading above par,” a trader said.

He saw the issue trading at $25.05 early in the session.

The deal priced Feb. 5.

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