Morning Commentary: Preferred primary space active; Energy Transfer rises; JPMorgan up

By James McCandless

San Antonio, June 20 – The preferred space started the session higher with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.26% while the primary market saw four new deals.

In primary activity, Sachem Capital Corp. plans to price a $25 million offering of five-year notes at par with a coupon of 7% to 7.125%.

The $25-par notes are redeemable after two years.

Meanwhile, Banco Santander, SA plans to sell dollar-denominated senior preferred debt securities.

The preferreds are redeemable 30 to 60 days after a tax event.

Cadence Bancorp. intends to sell fixed-to-floating rate subordinated notes due 2029.

Interest will accrue at a fixed rate for the first five years and at a rate based on Libor after 2024.

The notes are non-callable for five years and then may be redeemed at par.

Annaly Capital Management, Inc. plans to price an offering of $25-par series I fixed-to-floating rate cumulative redeemable preferred stock at par.

The preferreds are redeemable on or after June 30, 2024 at par. Prior to that, they are redeemable within 120 days after a change-of-control event.

The dividend is fixed until June 30, 2024, then converts to a floating rate of Libor plus a spread.

In secondary activity, Energy Transfer Operating, LP’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units were on the rise early.

The preferreds (NYSE: ETPPrE) were up 15 cents to $25.05 on volume of about 368,000 shares.

Elsewhere, in the finance space, JPMorgan Chase & Co.’s 6% series EE non-cumulative preferreds were also moving up.

The preferreds (NYSE: JPMPrC) gained 8 cents to $27.22 with about 131,000 shares trading.

Sector peer Citigroup, Inc.’s 6.875% series K fixed-to-floating rate non-cumulative preferred stock followed the positive trend.

The preferreds (NYSE: CPrK) were better by 7 cents to $28.00 on volume of about 123,000 shares.

Morgan Stanley’s 7.125% series E fixed-to-floating rate non-cumulative preferreds were improving slightly.

The preferreds (NYSE: MSPrE) added 3 cents to $29.06 with about 102,000 shares trading.

In utilities, Southern California Edison, a subsidiary of Edison International, saw its 5% trust preference securities take a negative path to start the session.

The preferreds (NYSE: SCEPrL) were down 2 cents to $20.94 on volume of about 85,000 shares.

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