Morning Commentary: Digital Realty to tap market; Morgan Stanley better; AGNC declines

By James McCandless

San Antonio, Oct. 1 – The preferred space started the day moving higher with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.10%.

Digital Realty Trust, Inc. plans to price a $150 million offering of $25-par series L cumulative redeemable preferred stock with 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 after five years at par. Prior to that, the preferreds are redeemable within 120 days after a change-of-control event.

Leading in the secondary, Morgan Stanley’s 6.375% series I fixed-to-floating rate non-cumulative preferred stock was floating upward.

The preferreds (NYSE: MSPrI) were up 5 cents to $27.99 on volume of about 101,000 shares.

Elsewhere in the banking and finance space, Bank of America Corp.’s 6.5% series Y non-cumulative preferreds were also improving.

The preferreds (NYSE: BACPrY) were gaining 9 cents to $25.26 with about 80,000 shares trading.

Real estate investment trust AGNC Investment Corp.’s new 6.5% series E fixed-to-floating rate cumulative redeemable preferred stock was under water, going against the early trend.

The preferreds, trading under the temporary symbol “AGNIP,” were losing 7 cents to $24.98 on volume of about 99,000 shares.

In the shipping space, Teekay Offshore Partners LP’s 8.5% series B cumulative redeemable preferred units were skyrocketing as the session started.

The preferreds (NYSE: TOOPrB) were jumping $2.38 to $18.22 with about 77,000 shares trading.

The company announced on Tuesday morning that it has entered into a merger agreement with Brookfield Business Partners LP.

As part of the agreement, the company’s preferred units will remain unchanged and outstanding.

Middle-market investment name PennantPark Investment Corp.’s recent 5.5% notes due 2024 were declining.

The notes (Nasdaq: PNNTG) were falling 8 cents to $24.75 on volume of about 71,000 notes.

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