Southern California Edison weakens; new Spire preferreds flat in secondary; JPMorgan up

By James McCandless

San Antonio, May 16 – Most volume leaders in the preferred market strengthened in secondary trading on Thursday, following the broader trend.

In the primary market, Prospect Capital Corp. entered into an agreement to sell up to $300 million more total of its $25-par 6.25% notes due 2024, 6.25% notes due 2028 and 6.875% notes due 2029.

Algonquin Power & Utilities Corp. priced a $350 million offering of series 2019-A $25-par fixed-to-floating rate subordinated notes due July 1, 2079 with an initial coupon of 6.2%.

Leading secondary activity, Southern California Edison, a subsidiary of Edison International, saw its 5% cumulative trust preference securities go negative.

Elsewhere, in utilities Spire Inc.’s new 5.9% series A cumulative redeemable perpetual preferred stock was active but level.

Meanwhile, in finance, JPMorgan Chase & Co.’s 6% series EE non-cumulative preferred stock was on the rise.

Sector peer Wells Fargo & Co.’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual class A preferreds saw a bump.

Ally Financial, Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities also ended better by session’s end.

Prospect Capital on tap

Prospect Capital entered into an agreement to sell up to $300 million more of its 6.25% notes due 2024, 6.25% notes due 2028 and 6.875% notes due 2029.

B. Riley FBR, Inc., BB&T Capital Markets and Comerica Securities, Inc. are listed as the sales agents.

The company is offering up to $100 million of each series of notes.

The offering is an add-on to the $35 million outstanding for the 6.25% notes due 2024, the $15 million outstanding for the 6.25% notes due 2028 and the $19 million outstanding for the 6.875% notes due 2029.

Algonquin prices

Algonquin priced a $350 million offering of series 2019-A $25-par fixed-to-floating rate subordinated notes due July 1, 2079 with an initial coupon of 6.2%.

BofA Securities, Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The notes are redeemable on or after July 1, 2024 at par. Prior to that, they are redeemable after a tax event.

The coupon is fixed until July 1, 2024, then converts to a floating rate of Libor plus a spread. The coupon resets again on July 1, 2029 and July 1, 2049.

SoCal Edison down

Leading volume though bucking the prevailing winds, Southern California Edison’s 5% cumulative trust preference securities ended lower.

The preferreds (NYSE: SCEPrL) were down 5 cents to close at $21.38 on volume of about 591,000 shares.

Elsewhere in utilities, Spire’s new 5.9% series A cumulative redeemable perpetual preferred stock was active but was fixed to its previous day’s closing price.

The preferreds, trading under the temporary symbol “SIPRY,” closed unchanged at $25.70 with about 307,000 shares trading.

JPMorgan rises

Meanwhile, in the finance space, JPMorgan’s 6% series EE non-cumulative preferred stock was on the rise.

The preferreds (NYSE: JPMPrC) picked up 3 cents to close at $26.48 on volume of about 441,000 shares.

On Wednesday, the preferreds added 5 cents.

Sector peer Wells Fargo’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual class A preferreds saw a bump as the day came to a close.

The preferreds (NYSE: WFCPrQ) gained 3 cents to close at $26.48 with about 248,000 shares trading.

Ally Financial’s 8.125% series 2 fixed-to-floating rate trust preferred securities also saw a slightly better result by the end of the session.

The preferreds (NYSE: ALLYPrA) were up 2 cents to close at $25.93 on volume of about 192,000 shares.

On Wednesday, the preferreds tacked on 1 cent.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index ended the day up by 0.30%, tripling a 0.10% rise in early Thursday trading.

The iShares US Preferred Stock ETF was up 3 cents to $36.62.

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