Morning Commentary: Preferreds mixed after jobs data; Citigroup, Global Indemnity active

By Christine Van Dusen and Stephanie N. Rotondo

Atlanta, Aug. 7 – Preferred stocks were mixed in trading on Friday on the news that the United States added 215,000 jobs in July, a boost that increases the possibility of a rate hike from the Federal Reserve next month.

“The jobs numbers are good, so long bonds are bouncing back a couple,” a trader said. “Our stuff has been pretty quiet.”

The new issue of $1.25 billion 5.95% $1,000-par series Q fixed-to-floating rate noncumulative preferred stock that Citigroup Inc. priced on Wednesday was trading Friday between 99¾ and 99 7/8, a trader said.

Citigroup Global Markets Inc. was the bookrunner for the preferreds.

Dividends will be fixed and payable semiannually through Aug. 15, 2020. After that date, the dividend floats at Libor plus 409.5 basis points and will be payable quarterly.

Dublin, Ireland-based insurance company Global Indemnity plc's $100 million 7.75% $25-par subordinated notes due Aug. 15, 2045 that priced on Wednesday were seen trading between $24.80 and $24.82 in the gray market, the trader said.

Morgan Stanley & Co. LLC and UBS Securities LLC were the joint bookrunning managers.

Interest will be payable on the 15th day of February, May, August and November. The company can redeem the notes on or after Aug. 15, 2020 at par plus accrued interest.

JPMorgan Chase & Co.’s recent $1.1 billion issue of 6.15% series BB noncumulative preferreds was seen trading between $24.92 and $24.99 on Friday, he said.

And the recent issue of preferred stock from Magnum Hunter Resources Corp. – $52.5 million 8% series D cumulative perpetual preferreds that sold at $44.00 per share – came under pressure after the company released better-than-expected but still lower earnings. The preferreds have a $50.00 liquidation preference.

Before this add-on, there were 3.02 million of the series D preferreds outstanding. The company had authorized the underwriters to sell up to an additional 10 million shares.

“Freddie Mac and Fannie Mae reported strong earnings, so they’re bouncing around,” the trader said.

TriplePoint lists

In other news on Friday morning, TriplePoint Venture Growth BDC Corp.’s $50 million of 6.75% $25-par notes due July 15, 2020 began trading on the New York Stock Exchange on Friday.

The ticker symbol is “TPVZ.” The deal priced July 30.

Keefe Bruyette & Woods Inc. and Deutsche Bank Securities Inc. were the joint bookrunning managers. Co-lead managers were BB&T Capital Markets, Janney Montgomery Scott LLC and Oppenheimer & Co. Inc.

Interest will be payable on the 15th day of January, April, July and October, beginning Oct. 15.

The notes become redeemable on or after July 15, 2017 at par plus accrued interest.

The Menlo Park, Calif.-based business development company will use the proceeds to temporarily repay a portion of outstanding borrowings under a credit facility. The funds may also be used for investments and for general working capital purposes.

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