Chimera taps market; Edison International preferred shares weaken; JPMorgan declines

By James McCandless

San Antonio, Jan. 15 – Tuesday’s session in the preferred market ended with mixed results and robust trading volume.

Chimera Investment Corp. priced $185 million of $25-par series D fixed-to-floating rate cumulative redeemable preferred stock with an initial dividend of 8%.

Leading secondary volume, Southern California Edison Co., a subsidiary of Edison International, saw its 5% cumulative trust preferreds trade lower.

Elsewhere in utilities, PG&E Corp.’s 6% cumulative nonredeemable first preferred stock was also falling.

Meanwhile, in finance, JPMorgan Chase & Co.’s 5.75% series DD non-cumulative preferreds were also declining.

Capital One Financial Corp.’s 6.2% series F non-cumulative perpetual preferred stock followed a negative trend.

Oil and gas name Energy Transfer Partners, LP’s 7.375% series C fixed-to-floating rate cumulative redeemable perpetual preferred units gained.

Chimera prices

Real estate investment trust Chimera priced $185 million of $25-par series D fixed-to-floating rate cumulative redeemable preferred stock with an initial dividend of 8%.

The deal was announced Tuesday morning.

There is a $27.75 million greenshoe.

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC, Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and Keefe, Bruyette & Woods, Inc. are the joint bookrunners.

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

SoCal Edison off

At the top of the secondary space, SoCal Edison’s 5% cumulative trust preferreds went negative in Tuesday’s session.

The preferreds (NYSE: SCEPrL) were down 5 cents to close at $18.00 on volume of about 865,000 shares.

Elsewhere in utilities, PG&E’s 6% cumulative nonredeemable first preferred stock fell sharply again.

The preferreds (NYSE: PCGPrA) lost $1.38 to close at $14.32 with about 393,000 shares trading.

On Monday, the preferreds dropped $3.11.

The company announced on Monday that it is preparing for bankruptcy after concerns that it would face a large accounting charge from liabilities from California wildfires.

The company reported to the Securities and Exchange Commission on Tuesday that it would be missing an interest payment on its 2040 senior notes.

JPMorgan loses

Meanwhile, in the finance sector, JPMorgan’s 5.75% series DD non-cumulative preferreds declined.

The preferreds (NYSE: JPMPrD) lost 5 cents to close at $24.93 on volume of about 632,000 shares.

On Monday, the preferreds fell 6 cents.

In its Q4 earnings statement released Tuesday, the company reported a $1.98 per share profit, missing analyst estimates of $2.20 per share.

Sector peer Capital One’s 6.2% series F non-cumulative perpetual preferred stock was also down at the close.

The preferreds (NYSE: COFPrF) declined by 4 cents to $25.72 with about 287,000 shares trading.

Energy Transfer rises

Oil and gas name Energy Transfer’s 7.375% series C fixed-to-floating rate cumulative redeemable perpetual preferred units improved.

The preferreds (NYSE: ETPPrC) gained 37 cents to close at $23.18 on volume of about 536,000 shares.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.05% at Tuesday’s close after opening up by 0.15%.

The iShares US Preferred Stock ETF was up 2 cents to $35.36.

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