Duke Energy, South Jersey tap market; Capital One preferreds weaker; Public Storage rises

By James McCandless

San Antonio, Sept. 9 – The preferred market shifted lower on Monday as newer issues dominated activity.

In primary activity, Duke Energy Corp. priced a $1 billion offering of $1,000-par series B fixed-rate reset cumulative redeemable perpetual preferred stock with a dividend of 4.875%.

South Jersey Industries, Inc. sold a $200 million offering of $25-par junior subordinated notes due Sept. 16, 2079 with a coupon of 5.625%.

Leading trading, Capital One Financial Corp. new 5% series I fixed-rate non-cumulative perpetual preferred stock ended weaker.

Elsewhere in finance, JPMorgan Chase & Co.’s 6% series EE non-cumulative preferred stock shifted upward.

In the REIT space, Public Storage’s new 4.875% series I cumulative preferred shares were on the rise.

Sector peer New Residential Investment Corp.’s 7.125% series B fixed-to-floating rate cumulative redeemable preferreds were under water.

Insurance provider Allstate Corp.’s 5.1% series H fixed-rate non-cumulative perpetual preferreds saw negativity.

Duke Energy’s deal

In the primary space, Duke Energy priced a $1 billion offering of $1,000-par series B fixed-rate reset cumulative redeemable perpetual preferred stock (Baa3/BBB/BBB-) with a dividend of 4.875%.

There is no greenshoe.

The deal was announced on Monday morning.

Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are the joint bookrunners.

The preferreds are redeemable on or after Sept. 16, 2024 or on any fifth anniversary of that date at par. Prior to that, the preferreds are redeemable within 120 days after a ratings event at 102.

South Jersey prices

South Jersey Industries, Inc. sold a $200 million offering of $25-par junior subordinated notes (BB+) due Sept. 16, 2079 with a coupon of 5.625%.

There is no greenshoe.

BofA Securities, Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The notes are redeemable on or after Sept. 16, 2024 at par. Prior to that, they are redeemable after a tax event at par and after a rating agency event at 102%.

Capital One lower

Leading secondary trading, Capital One’s new 5% series I fixed-rate non-cumulative perpetual preferred stock ended the session weaker.

The preferreds, trading under the temporary symbol “COFOL,” were down 15 cents to close at $24.94 on volume of about 1.5 million shares.

On Friday, the preferreds landed above par at $25.09.

Elsewhere in the finance space, JPMorgan’s 6% series EE non-cumulative preferred stock shifted upward.

The preferreds (NYSE: JPMPrC) gained 3 cents to close at $28.26 with about 278,000 shares trading.

On Friday, the preferreds picked up 12 cents.

Public Storage rises

Real estate investment trust Public Storage’s new 4.875% series I cumulative preferred shares were on the rise on Monday.

The preferreds, trading under the temporary symbol “PBSSP,” added 5 cents to close at $25.30 on volume of about 1 million shares.

On Friday, the preferreds ended at $25.25 on its first trading day.

Sector peer New Residential’s 7.125% series B fixed-to-floating rate cumulative redeemable preferreds spent the day under water.

The preferreds (NYSE: NRZPrB) dropped 7 cents to close at $24.99 with about 254,000 shares trading.

Allstate negative

Meanwhile, insurance provider Allstate’s 5.1% series H fixed-rate non-cumulative perpetual preferreds saw negativity as the session closed.

The preferreds (NYSE: ALLPrH) shaved off 8 cents to close at $26.13 on volume of about 398,000 shares.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index finished Monday down by 0.04%, doubling the small 0.02% loss from early Monday trading.

The iShares US Preferred Stock ETF was down 10 cents to $37.35.

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