Midday Commentary: New JPMorgan issue holds steady; 'active calendar coming up' for preferreds

By Christine Van Dusen

Atlanta, Jan. 15 - JPMorgan Chase & Co.'s new preferred stock received the most attention on an otherwise low-volume, "apathetic" Wednesday for the preferred stock market, a trader said.

The New York-based bank on Tuesday priced $2 billion of 6¾% series S fixed-to-floating rate perpetual preferred stock at par with underwriter J.P. Morgan Securities LLC. Beginning Feb. 1, 2024, the preferreds convert to a floating rate of Libor plus 378 basis points.

"It really moved up and now is locked at around 101," the trader said.

In other trading on Wednesday, Deutsche Bank Contingent Capital Trust II's 6.55% trust preferred securities were among the most active, quoted up a penny at $25.08 on 403,864 shares.

Morgan Stanley Capital Trust VI's 6.6% capital securities were spotted at $24.81, up 18 cents on a light 69,445 shares.

And Wells Fargo & Co.'s 8% non-cumulative perpetual preferred stock, series J, traded Wednesday at $28.35, up 12 cents on volume totaling 40,771.

"It seems like we had a pretty good move to start the year," the trader said. "Now, on light volume, we've moved up and are now just sitting there. There's no bid money starting to come in."

He expects the issuance pipeline to fill up as soon as banks and insurance companies finish reporting their company earnings.

"We're hearing rumors of an active calendar coming up," he said.

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