Morning Commentary: First Busey prices; Valley National on tap; Brighthouse under water

By James McCandless

San Antonio, May 29 – On the last day of a holiday-shortened week, the preferred space saw more gains as the Wells Fargo Hybrid & Preferred Securities Financial index started up by 0.08%.

Kicking off the primary market, First Busey Corp. sold a $125 million offering of $1,000-par fixed-to-floating rate subordinated notes due June 1, 2030 with a coupon of 5.25%.

Piper Sandler & Co., Stephens Inc. and Janney Montgomery Scott LLC are the bookrunners.

The coupon is fixed until June 1, 2025, then converts to a floating rate of the three-month SOFR plus 511 basis points.

The notes are redeemable on or after June 1, 2025. Prior to that, the notes are redeemable if a change in law prevents the company from deducting interest from the notes, if an event precludes the notes from being considered tier 2 capital or if the company is required to register as an investment company.

Also, Valley National Bancorp said it plans to price $1,000-par fixed-to-floating rate subordinated notes due 2030.

Keefe, Bruyette & Woods, Inc., Morgan Stanley & Co. LLC and Piper Sandler & Co. are the bookrunners.

The coupon is fixed for five years, then converts to a floating rate of the three-month SOFR plus a spread.

The notes are redeemable after five years at par. Prior to that, the notes are redeemable after a tax event, tier 2 capital event, or if the company is required to register as an investment company.

Leading early secondary trading volume, insurance company Brighthouse Financial Inc.’s 6.75% series B non-cumulative perpetual preferred stock was under water as the day began.

The preferreds (Nasdaq: BHFAO) were down 3 cents to $25.35 on volume of about 67,000 shares.

Meanwhile, in the finance space, Bank of America Corp.’s 5% series LL non-cumulative preferred stock was seen picking up steam.

The preferreds (NYSE: BACPrN) were improving by 9 cents to $25.00 with about 60,000 shares trading.

Sector peer Truist Financial Corp.’s 5.25% series O non-cumulative perpetual preferreds were following the prevailing trend.

The preferreds, trading under the temporary symbol “TFCLL,” were gaining 10 cents to $25.30 on volume of about 55,000 shares.

Citigroup Capital XIII’s 7.875% fixed-to-floating rate trust preferred securities were on the rise on Friday morning.

The preferreds (NYSE: CPrN) were tacking on 6 cents to $27.11 with about 30,000 shares trading.

Elsewhere, in communications, Qwest Corp.’s 6.5% notes due 2056 were relatively active but unchanged early on.

The notes (NYSE: CTBB) were holding level at $23.58 on volume of about 26,000 notes.

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