NextEra Energy sells $25-par debentures; JPMorgan up; Southern California Edison sinks

By James McCandless

San Antonio, March 6 – Top traders in the preferred market were mixed but leaning positive as a new issue priced.

NextEra Energy Capital Holdings, Inc., a subsidiary of NextEra Energy, Inc., priced $600 million of $25-par 60-year series N junior subordinated debentures at par with a coupon of 5.65%.

The company’s existing 5.25% series K junior subordinated debentures due 2076 dropped precipitously.

Elsewhere, JPMorgan Chase & Co.’s 6% series EE and 5.75% series DD non-cumulative preferreds both closed better.

Sector peer People’s United Financial, Inc.’s 5.625% series A fixed-to-floating rate non-cumulative perpetual preferred stock was also positive.

In utilities, Southern California Edison, a subsidiary of Edison International, saw its 5.375% fixed-to-floating rate cumulative trust preferred securities and its 5% cumulative trust preferred securities sink.

Meanwhile, insurance provider National General Holdings Corp.’s 7.5% series C non-cumulative preferreds gained.

NextEra prices

NextEra Energy Capital priced $600 million of $25-par 60-year series N junior subordinated debentures (Baa2/BBB/BBB) at par with a coupon of 5.65%.

There is a $90 million greenshoe.

The deal was announced Wednesday morning.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The debentures are redeemable on or after June 15, 2024 at par. Prior to that, they are redeemable within 90 days after a tax event or a ratings agency event.

In the secondary, the company’s existing 5.25% series K junior subordinated debentures due 2076 saw a drop.

The debentures (NYSE: NEEPrK) fell 71 cents to close at $24.71 on volume of about 339,000 debentures.

JPMorgan better

Elsewhere, in the finance space, JPMorgan’s 6% series EE and 5.75% series DD non-cumulative preferreds were both better by the end of the session.

The series EE preferreds (NYSE: JPMPrC) added 2 cents to close at $26.37 with about 1.3 million shares trading.

The series DD preferreds (NYSE: JPMPrD) picked up 5 cents to close at $25.85 with about 595,000 shares trading.

Sector peer People’s Financial’s 5.625% series A fixed-to-floating non-cumulative perpetual preferred stock was also positive.

The preferreds (Nasdaq: PBCTP) were up 3 cents to close at $23.96 on volume of about 300,000 shares.

SoCal Edison craters

Meanwhile, in the utilities sector, Southern California Edison’s 5.375% fixed-to-floating rate cumulative trust preferred securities and its 5% cumulative trust preferred securities declined on Wednesday.

The 5.375% preferreds (NYSE: SCEPrJ) shaved off 77 cents to close at $22.05 with about 745,000 shares trading.

The 5% preferreds (NYSE: SCEPrL) fell 34 cents to close at $21.07 with about 318,000 shares trading.

On Wednesday, Moody’s Investors Service downgraded several of its ratings and the ratings of parent company Edison International, citing a continued potential for multi-billion dollar exposure to risks related to potential wildfires.

National General gains

Insurance provider National General’s 7.5% series C non-cumulative preferreds improved by the close of the session.

The preferreds (Nasdaq: NGHCN) rose 34 cents to close at $21.94 on volume of about 335,000 shares.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index closed 0.14% higher, flipping a 0.15% drop from early morning trading.

The iShares US Preferred Stock ETF was up 10 cents to $36.40.

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