Preferreds soften; Sterling Bancorp prices $225 million; Bank of America, U.S. Bancorp lower

By Cristal Cody

Tupelo, Miss., Oct. 28 – Preferred stocks ended Wednesday mostly softer along with equities as the growing number of global Covid-19 infections pressured the financial markets over the session.

The U.S. iShares Preferred Stock ETF shed 64 cents, or 1.74% to $36.13.

The Wells Fargo Hybrid and Preferred Securities index declined 29.21, 1.17%.

Equities were down across the indexes.

The Dow Jones industrial average softened 3.43%, the S&P 500 dropped 3.53% and the Nasdaq declined 3.73% on Wednesday.

Meanwhile, one issuer tapped the primary market.

Sterling Bancorp priced $225 million of 10-year fixed-to-floating-rate subordinated notes in an offering upsized from $200 million.

Sterling Bancorp upsizes

Sterling Bancorp sold $225 million of 10-year fixed-to-floating-rate subordinated notes (Kroll: BBB) on Wednesday at par to yield 3.875%, according to an FWP filing with the Securities and Exchange Commission.

The rate will reset Nov. 1, 2025 to a floating rate of SOFR plus 369 basis points.

The deal was upsized from $200 million at the launch.

Piper Sandler & Co., U.S. Bancorp Investments Inc. and PNC Capital Markets LLC were the bookrunners.

Sterling Bancorp is a Pearl River, N.Y.-based parent holding company of Sterling National Bank.

Bank of America softens

Deal volume week to date includes $1.1 billion of 4.375% 25-par perpetual non-cumulative preferreds (Baa3/BBB-/BBB) that priced on Tuesday from Bank of America Corp.

Initial price talk on Bank of America’s preferreds was in the 4.625% area.

The preferreds, admitted for temporary trading under the symbol “BACPL,” headed out on Wednesday down at $24.92 on trading volume of about 10.5 million shares.

Bank of America plans to apply to list the depositary shares representing the series NN preferreds on the New York Stock Exchange under the symbol “BACPrO.”

Also on Tuesday, Banc of California, Inc. sold $85 million of 10-year fixed-to-floating-rate subordinated notes (Kroll: BBB-).

Other financial supply this week includes Bank of New York Mellon Corp.’s $582.5 million of 3.7% series H $1,000-par noncumulative perpetual preferred shares (Baa1/BBB/BBB+) that priced Monday.

The preferreds priced tighter than talk in the 3.875% area.

BNY Mellon’s preferreds will not be listed on a securities exchange for trading.

In other new issue trading on Wednesday, Wells Fargo & Co. (A2/BBB+/A+)’s 4.7% $25-par series AA non-cumulative perpetual class A preferred stock softened 58 cents, or 2.32%, to $24.40 on about 391,000 shares traded under the temporary symbol, “WFCCL.”

Wells Fargo sold $1.17 billion of the preferreds on Oct. 21 tighter than guidance in the 4.75% to 4.875% area.

The company plans to list the issue on the New York Stock Exchange under the symbol “WFCPrA.”

Fulton Financial steady

Fulton Financial Corp.’s 5.125% series A fixed-rate non-cumulative perpetual preferred stock were unchanged on the day at $25.80 on about 617,000 shares trading.

Fulton Financial sold $200 million of the $25-par preferreds on Thursday.

The preferreds are trading under the temporary symbol “FULPP” with the company expected to list the preferreds on the Nasdaq under the symbol “FULTP.”

U.S. Bancorp’s new 3.75% series L non-cumulative perpetual preferred stock (A3/BBB/BBB+) declined over the session.

The preferreds, trading under the temporary symbol “UBKPL,” closed the day down 53 cents, or 2.18%, at $23.77 on about 325,000 shares traded.

U.S. Bancorp sold $500 million of the $25-par preferreds on Oct. 20.

The company plans to list the preferreds on the New York Stock Exchange under the symbol “USBPrQ.”

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