Primary preferred market comes alive; American Finance preferreds decline; Allstate under water

By James McCandless

San Antonio, Sept. 5 – Amid rumblings in the primary space, the preferred secondary saw varying movements.

Capital One Financial Corp. priced a $1.5 billion offering of $25-par series I fixed-rate non-cumulative perpetual preferred stock at par with a dividend of 5%.

Later in the day, Fortress Transportation and Infrastructure Investors LLC priced a $75 million offering of $25-par series A fixed-to-floating rate cumulative redeemable perpetual preferred stock with an initial dividend of 8.25%.

Public Storage sold a $275 million offering of $25-par series I cumulative preferred shares at par with a dividend of 4.875%.

In the secondary, REIT American Finance Trust, Inc.’s 7.5% series A cumulative redeemable perpetual preferred stock declined after the company priced an add-on.

Sector peer Annaly Capital Management, Inc.’s 6.75% series I fixed-to-floating rate cumulative redeemable preferreds saw gains.

Meanwhile, Allstate Corp.’s 5.1% series H fixed-rate non-cumulative perpetual preferred stock also ended under water.

In finance, Wells Fargo & Co.’s 5.5% series X non-cumulative perpetual class A preferreds followed top traders lower.

JPMorgan Chase & Co.’s 6% series EE non-cumulative preferred stock improved.

Capital One prices

Capital One priced a $1.5 billion offering of $25-par series I fixed-rate non-cumulative perpetual preferred stock (Baa3/BB/BB) at par with a dividend of 5%.

There is no greenshoe.

The deal, announced on Wednesday, came in under talk for a yield in the 5.25% area.

BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The preferreds are redeemable on or after Dec. 1, 2024 at par. Prior to that, they are redeemable within 90 days after a regulatory capital treatment event.

Fortress’ deal

Later in the day, Fortress Transportation priced a $75 million offering of $25-par series A fixed-to-floating rate cumulative redeemable perpetual preferred stock with an initial dividend of 8.25%.

There is an $11.25 million greenshoe.

The deal was announced on Thursday morning.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, UBS Securities LLC and Stifel, Nicolaus & Co., Inc. are the joint bookrunners.

The dividend is fixed until Sept. 15, 2024, then converts to a floating rate of Libor plus 688.6 basis points.

The preferreds are redeemable on or after Sept. 15, 2024 at par. Prior to that, they are redeemable at $25.25 after a tax redemption event, at $25.25 within 120 days after a change of control or at $25.50 within 120 days after a rating event.

Public Storage taps market

Public Storage sold a $275 million offering of $25-par series I cumulative preferred shares at par with a dividend of 4.875%.

There is a $41.25 million greenshoe.

BofA Securities, Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The preferreds are redeemable on or after Sept. 12, 2024 at par.

American Finance down

In secondary trading, real estate investment trust American Finance’s 7.5% series A cumulative redeemable perpetual preferred stock was seen declining.

The preferreds (Nasdaq: AFINP) lost 6 cents to close at $25.23 on volume of about 1.4 million shares.

On Wednesday, the preferreds sunk 66 cents.

On Thursday morning, the company sold $75 million more of its $25-par 7.5% series A cumulative redeemable perpetual preferred stock at $25.25.

Sector peer Annaly Capital’s 6.75% series I fixed-to-floating rate cumulative redeemable preferreds saw gains at the end of the session.

The preferreds (NYSE: NLYPrI) added 7 cents to close at $25.50 with about 1 million shares trading.

Allstate dips

Meanwhile, insurance provider Allstate’s 5.1% series H fixed-rate non-cumulative perpetual preferred stock also ended the afternoon under water.

The preferreds (NYSE: ALLPrH) fell 12 cents to close at $26.27 on volume of about 460,000 shares.

On Wednesday, the preferreds picked up 12 cents.

Wells Fargo lower

In the finance space, Wells Fargo’s 5.5% series X non-cumulative perpetual class A preferreds followed top traders to lower levels.

The preferreds (NYSE: WFCPrX) shaved off 7 cents to close at $25.67 with about 450,000 shares trading.

JPMorgan’s % series EE non-cumulative preferred stock improved.

The preferreds (NYSE: JPMPrC) rose 4 cents to close at $28.11 on volume of about 375,000 shares.

Indexes vary

The Wells Fargo Hybrid & Preferred Securities Financial index finished down by 0.06%, doubling the 0.03% loss from early Thursday trading.

The iShares US Preferred Stock ETF was up 2 cents to $37.38.

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