Morning Commentary: MetLife in focus; JPMorgan sets talk; AdCare Health plans issuance

By Christine Van Dusen

Atlanta, May 28 – MetLife Inc. received some attention in the preferred stock market on Thursday following the Wednesday pricing of a $1.5 billion offering of 5.25% $1,000-par series C fixed-to-floating rate noncumulative preferreds.

The preferreds had been talked in the 5.375% area. Dividends will be fixed and payable semiannually through June 15, 2020. On that date, the dividend will begin to float at Libor plus 357.5 basis points and will be payable quarterly.

Proceeds from the deal – which came via Goldman Sachs & Co., BofA Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC – will be used to repurchase some or all of the company’s outstanding 6.5% series B noncumulative preferreds (NYSE: METPB).

In the wake of the new-issue news, the B’s on Wednesday dropped 62 cents to $25.15. On Thursday the preferreds were seen at $25.14.

Also on Thursday, JPMorgan Chase & Co. set talk in the 6.25% area for a $400 million offering of $25-par non-cumulative perpetual preferred stock, according to a company announcement.

The preferreds are redeemable in whole or in part after June 15, 2020 at par plus accrued dividends.

The proceeds will be used for general corporate purposes.

JPMorgan is the bookrunner. BofA Merrill Lynch, Citigroup, Morgan Stanley, UBS and Wells Fargo Securities LLC are the joint lead managers for the Securities and Exchange Commission-registered deal.

And Atlanta-based AdCare Health Systems Inc. is offering up to 400,000 shares of its 10.875% series A cumulative redeemable preferred stock (ADK.PRA), according to a company announcement.

The health care-focused real estate investment trust plans to use the proceeds for general corporate purposes, including the repayment of debt, for working capital and for funding potential acquisitions.

MLV & Co. LLC and Northland Capital Markets are the bookrunners for the SEC-registered deal.

Trading mixed

In trading on Thursday, MetLife’s 6.5% non-cumulative preferred stock, series B, was down a penny to $25.14 on 155,769 shares traded.

Barclays Bank plc’s 8.125% non-cumulative callable dollar preference shares, series 5 ADR, climbed 9 cents to $25.93 on 38,033 shares traded.

And USBancorp Capital Trust I’s 8.45% beneficial unsecured securities, series A, dropped 19 cents to $31.76 on 19,004 shares traded.

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