Citizens Financial taps $25-par market; Capital One unmoved; Allstate preferreds improve

By James McCandless

San Antonio, Oct. 21 – The preferred market started the week continuing the negative trend from the previous week, though top traders varied.

In primary activity, Citizens Financial Group, Inc. priced an upsized $450 million offering of $25-par series E fixed-rate non-cumulative perpetual preferred stock at par with a dividend of 5%.

Leading the secondary, Capital One Financial Corp.’s 5% series I fixed-rate non-cumulative perpetual preferred stock was active but rigid.

Sector peer Bank of America Corp.’s 5% series LL non-cumulative preferreds ended the day in a slightly better position.

Meanwhile, insurance provider Allstate Corp.’s 5.1% series H fixed-rate non-cumulative perpetual preferred stock improved.

Oil and gas name Energy Transfer Operating, LP’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units declined.

Mortgage company Ellington Financial Inc’s new 6.75% series A fixed-to-floating rate cumulative redeemable preferreds gained.

Citizens’ deal

In Monday primary activity, Citizens Financial priced an upsized $450 million offering of $25-par series E fixed-rate non-cumulative perpetual preferred stock at par with a dividend of 5%.

The deal, announced Monday morning, was upsized from an initial $250 million and came in at the low end of talk for a dividend in the 5.25% area.

Morgan Stanley & Co. LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, UBS Securities LLC, Wells Fargo Securities LLC, Citizens Capital Markets, Inc., Barclays and Credit Suisse Securities (USA) LLC are the joint bookrunners.

The preferreds are redeemable on or after Jan. 6, 2025 at par. Prior to that, they are redeemable within 90 days after a regulatory capital treatment event at par.

Capital One flat

Leading volume in the secondary, Capital One’s 5% series I fixed-rate non-cumulative perpetual preferred stock was active but rigid by the end of the session.

The preferreds (NYSE: COFPrI) were unchanged, closing at $25.10 on volume of about 307,000 shares.

On Friday, the preferreds added 1 cent.

Sector peer Bank of America’s 5% series LL non-cumulative preferreds ended the afternoon in a slightly better position.

The preferreds (NYSE: BACPrN) picked up 1 cent to close at $25.80 with about 252,000 shares trading.

On Friday, the preferreds fell 1 cent.

Allstate up

Meanwhile, insurance provider Allstate’s 5.1% series H fixed-rate non-cumulative perpetual preferred stock spent the day improving.

The preferreds (NYSE: ALLPrH) rose 6 cents to close at $26.47 on volume of about 277,000 shares.

Energy Transfer off

Oil and gas name Energy Transfer’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units declined throughout the session.

The preferreds (NYSE: ETPPrE) shifted down 4 cents to close at $25.80 with about 265,000 shares trading.

Ellington gains

Elsewhere, mortgage company Ellington’s new 6.75% series A fixed-to-floating rate cumulative redeemable preferreds gained.

The preferreds, trading under the temporary symbol “EGLLP,” tacked on 1 cent to close at $25.20 on volume of about 233,000 shares.

On Friday, the preferreds were up by 3 cents.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index finished the day down by 0.07%, giving back a 0.10% rise from early Monday trading.

The iShares US Preferred Stock ETF were down 2 cents to $37.53.

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