Morning Commentary: Bank of America preps offering; Brighthouse lower; Gabelli down

By James McCandless

San Antonio, June 18 – The preferred space began Tuesday on a positive note with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.19% though top traders were mixed.

In primary activity, Bank of America Corp. priced a $1 billion offering of $1,000-par series JJ fixed-to-floating rate non-cumulative preferred stock with an initial dividend of 5.125% on Monday.

There is no greenshoe.

BofA Securities, Inc. is the bookrunner.

The preferreds are redeemable on or after June 20, 2024. Prior to that, they are redeemable within 90 days after a capital treatment event.

On Tuesday morning, the company announced plans to price a benchmark offering of $25-par series KK non-cumulative preferred stock with a dividend of 5.5%.

BofA Securities is the bookrunner.

The preferreds are redeemable after five years. Prior to that, they are redeemable within 90 days after a capital treatment event.

Meanwhile, in the secondary, Bank of America’s existing 6.625% series W non-cumulative preferred stock started the session lower.

The preferreds (NYSE: BACPrW) were down 7 cents to $25.44 on volume of about 55,000 shares.

Elsewhere in the finance space, Deutsche Bank Contingent Capital Trust II’s 6.55% trust preferred securities were on an upward trend.

The preferreds (NYSE: DXB) were better by 10 cents to $25.00 with about 46,000 shares trading.

Insurance provider Brighthouse Financial, Inc.’s 6.6% series A non-cumulative perpetual preferred stock was trailing at the open.

The preferreds (Nasdaq: BHFAP) were off by 7 cents to $26.94 on volume of about 209,000 shares.

Closed-end mutual fund Gabelli Dividend & Income Trust’s 5.375% series H cumulative preferreds were slightly negative.

The preferreds (NYSE: GDVPrH) were lower by 1 cent to $25.30 with about 58,000 shares trading.

Communications name Qwest Corp.’s 6.5% notes due 2056 were performing better at the open.

The notes (NYSE: CTBB) were up 6 cents to $22.90 on volume of about 47,000 notes.

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