Digital Realty sells preferreds; AGNC active, unchanged, Wells Fargo improves

By James McCandless

San Antonio, Oct. 1 – The preferred space spent much of the Tuesday session varying in direction.

In the primary space, Digital Realty Trust, Inc. priced an upsized $300 million offering of $25-par series L cumulative redeemable preferred stock with a dividend of 5.2%.

Allegiance Bancshares, Inc. sold a $60 million offering of $1,000-par fixed-to-floating rate subordinated notes with an initial coupon of 4.7%.

AerCap Holdings NV plans to sell an offering of $1,000-par 60-year fixed-rate reset junior subordinated notes.

Secondary trading saw REIT AGNC Investment Corp.’s new 6.5% series E fixed-to-floating rate cumulative redeemable preferreds active but level.

Sector peer Public Storage, Inc.’s 4.875% series I cumulative preferred shares dove.

Meanwhile, Wells Fargo & Co.’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual class A preferreds improved.

Elsewhere in finance, Capital One Financial Corp.’s 5% series I fixed-rate non-cumulative perpetual preferreds also closed positive.

Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferred stock were trailing.

Digital Realty prices

In the primary space, Digital Realty priced an upsized $300 million offering of $25-par series L cumulative redeemable preferred stock (Baa3/BB+/BB+) with a dividend of 5.2%.

There is a $45 million greenshoe.

The deal, announced Tuesday morning, was upsized from an initial $150 million and came in below talk for a dividend of 5.25% to 5.375%.

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 Oct. 10, 2024 at par. Prior to that, the preferreds are redeemable within 120 days after a change-of-control event.

Allegiance’s deal

Allegiance sold a $60 million offering of $1,000-par fixed-to-floating rate subordinated notes (Kroll: BBB-) with an initial coupon of 4.7%.

There is no greenshoe.

The deal was announced on Sept. 20 and closed on Sept. 27.

Keefe, Bruyette & Woods is the bookrunner.

The coupon is fixed until Oct. 1, 2024, then converts to a floating rate of Libor plus 313 basis points.

The notes are redeemable on or after Oct. 1, 2024 at par. Prior to that, the notes are redeemable after a tax event, a regulatory capital event or in the event that the company is required to register as an investment company.

AerCap offers notes

AerCap plans to sell an offering of $1,000-par 60-year fixed-rate reset junior subordinated notes, according to a 424B3 filing with the Securities and Exchange Commission.

Credit Suisse Securities (USA) LLC, BofA Securities, Inc. and J.P. Morgan Securities LLC are the joint bookrunners.

The coupon resets after five years and every five years thereafter.

The notes are redeemable after five years. Prior to that, they are redeemable after a tax redemption event and within 120 days after a ratings agency event.

AGNC active, flat

Leading secondary trading, AGNC’s new 6.5% series E fixed-to-floating rate cumulative redeemable preferreds were active but unchanged at the close.

The preferreds, trading under the temporary symbol “AGNIP,” closed Tuesday unmoved at $25.05 on volume of about 853,000 shares.

On Monday, the preferreds picked up 14 cents.

Sector peer Public Storage’s 4.875% series I cumulative preferred shares dove during the session.

The preferreds (NYSE: PSAPrI) dropped 22 cents to close at $26.04 with about 445,000 shares trading.

On Monday, the preferreds tacked on 10 cents.

Wells Fargo up

Meanwhile, Wells Fargo’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual class A preferreds improved.

The preferreds (NYSE: WFCPrQ) garnered 13 cents to close at $26.55 on volume of about 465,000 shares.

On Monday, the preferreds dropped 32 cents

Elsewhere in the finance space, Capital One’s 5% series I fixed-rate non-cumulative perpetual preferreds also closed the afternoon positive.

The preferreds (NYSE: COFPrI) rose 1 cent to close at $24.98 with about 301,000 shares trading.

Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferred stock spent the day trailing.

The preferreds (NYSE: MSPrK) fell 2 cents to close at $27.28 on volume of about 296,000 shares.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index shot up 0.30% to close the day, tripling a 0.10% gain early Tuesday.

The iShares US Preferred Stock ETF was down 5 cents to $37.32.

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