CNB, Southern National price; Legg Mason $25-par notes diverge; Wells Fargo positive

By James McCandless

San Antonio, Aug. 20 – Entering the back half of the week, the preferred space met the end of the Thursday session with a rise.

In afternoon primary activity, DiamondRock Hospitality Co. priced a $110 million offering of $25-par series A cumulative redeemable preferred stock with a dividend of 8.25%.

Also, Southern National Bancorp of Virginia, Inc. priced an upsized offering of $60 million of $1,000-par fixed-to-floating rate subordinated notes due August 2030.

As the secondary market’s volume leader, asset manager Legg Mason, Inc.’s 5.45% junior subordinated notes rose while its 6.375% junior subordinated notes due 2056 dipped.

Meanwhile, in the finance space, Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferred stock was positive.

Sector peer Truist Financial Corp.’s 4.75% series R non-cumulative perpetual preferreds moved upward along the day’s trend.

U.S. Bancorp’s series B floating rate non-cumulative perpetual preferred stock finished the afternoon rising.

Elsewhere, telecom services provider AT&T, Inc.’s 4.75% series C perpetual preferred stock was lifted.

DiamondRock prices

In Thursday afternoon primary activity, DiamondRock priced a $110 million offering of $25-par series A cumulative redeemable preferred stock with a dividend of 8.25%.

There is a $15 million greenshoe.

Wells Fargo Securities, LLC, BofA Securities, Inc. and Citigroup Global Markets Inc. are the bookrunners.

The preferreds are redeemable on or after Aug. 31, 2025 at par. Prior to that, the preferreds are redeemable within 120 days after a change of control at par.

Southern National’s deal

Also Southern National priced an upsized offering of $60 million of $1,000-par fixed-to-floating rate subordinated notes (Kroll: BBB-) due August 2030.

The initial rate on the notes is 5.4% until Sept. 1, 2025 when the rate converts to a floating rate.

The floating rate will be SOFR plus 531 basis points for the remainder of the life of the notes.

The notes are redeemable after five years at par. Prior to that, the notes are redeemable after a change in law, a tier 2 capital event or if the company is required to register as an investment company at par.

Janney Montgomery Scott LLC and Piper Sandler & Co. are the bookrunners.

Legg Mason varies

As the secondary market’s volume leader, asset manager Legg Mason’s 5.45% junior subordinated notes rose to better levels while its 6.375% junior subordinated notes due 2056 dipped.

The 5.45% notes (NYSE: LMHB) were up 5 cents to close at $25.80 on volume of about 861,000 notes.

The 6.375% notes (NYSE: LMHA) declined by 13 cents to close at $25.70 on volume of about 409,000 shares.

Wells Fargo up

Meanwhile, in the finance space, Wells Fargo’s 4.75% series Z non-cumulative perpetual class A preferred stock was positive.

The preferreds (NYSE: WFCPrZ) racked up 9 cents to close at $25.04 with about 661,000 shares trading.

On Wednesday, the preferreds tacked on 2 cents.

Sector peer Truist’s 4.75% series R non-cumulative perpetual preferreds moved upward along the day’s overarching trend.

The preferreds (NYSE: TFCPrR) improved by 9 cents to close at $26.28 on volume of about 469,000 shares.

U.S. Bancorp’s series B floating rate non-cumulative perpetual preferred stock finished the afternoon rising.

The preferreds (NYSE: USBPrH) jumped up 48 cents to close at $23.45 with about 288,000 shares trading.

On Wednesday, the preferreds shot up 79 cents.

AT&T lifted

Elsewhere, telecom services provider AT&T’s 4.75% series C perpetual preferred stock was lifted as the session wound down.

The preferreds (NYSE: TPrC) shifted up 8 cents to close at $25.48 on volume of about 196,000 shares.

On Wednesday, the preferreds garnered 5 cents.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.28% as the day ended, rising past the 0.14% gain from early Thursday trading.

The iShares US Preferred Stock ETF was down 3 cents to $36.57.

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