Morning Commentary: Citigroup taps preferred market; Public Storage, Capital One top par

By James McCandless

San Antonio, Sept. 6 – As the week headed for its conclusion, the preferred space saw varying movements as the Wells Fargo Hybrid & Preferred Securities Financial index began up by 0.03%.

In primary activity, Citigroup Inc. priced a $1.5 billion offering of $1,000-par series U fixed-to-floating rate non-cumulative preferred stock with an initial dividend of 5%.

There is no greenshoe.

Citigroup Global Markets Inc. is the bookrunner.

The dividend is fixed until Sept. 12, 2024, then converts to a floating rate of SOFR plus 381.3 basis points.

The preferreds are redeemable on or after Dec. 12, 2024 at par. Prior to that, they are redeemable within 90 days after a regulatory capital event.

Leading in the secondary, real estate investment trust Public Storage’s new $275 million 4.875% series I cumulative preferred shares were trending above par on their first day.

The preferreds, trading under the temporary symbol “PBSSP,” were seen trading at $25.10 on volume of about 1.4 million shares.

Sector peer National Retail Properties, Inc.’s 5.7% series E cumulative redeemable preferred stock was sinking as the session began.

The preferreds (NYSE: NNNPrE) were dropping 22 cents to $25.13 with about 129,000 shares trading.

After the Thursday close, the company announced the redemption of its outstanding series E preferreds for $25.00 per share on Oct. 5.

Meanwhile, in the finance space, Capital One Financial Corp.’s new $1.5 billion 5% series I fixed-rate non-cumulative perpetual preferred stock was moving above par.

The preferreds, trading under the temporary symbol “COFOL,” were seen at $25.10 on volume of about 1 million shares.

Transportation name Fortress Transportation and Infrastructure Investors LLC’s new $75 million 8.25% series A fixed-to-floating rate cumulative redeemable perpetual preferred stock was active but fixed at par this morning.

The preferreds, trading under the temporary symbol “FRTRP,” were unchanged at $25.00 with about 411,000 shares trading.

Insurance name Maiden Holdings Ltd.’s 8.25% series A non-cumulative preference shares were falling.

The preferreds (NYSE: MHPrA) were off 23 cents to $5.42 on volume of about 178,000 shares.

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