JPMorgan brings upsized $25-par offering, trades under par; Diana’s $25-par notes list

By Stephanie N. Rotondo

Phoenix, May 29 – The preferred stock market was edging up early Friday but came in by the end of business due to another round of weak economic data.

The federal government cut its gross domestic product estimate to a negative 0.7% annualized rate from the 0.2% gain forecast last month.

A trader said the data was “not supporting an interest rate increase in September.”

Additionally, the Chicago PMI declined to the lowest levels since February.

While the GDP data was taken with a bit of a shrug, the manufacturing index’s decline in May was seen as a bigger deal. The market had been hoping for a higher figure following a weak first quarter.

The Wells Fargo Hybrid and Preferred Securities index closed off 15 basis points. The index was up 3 bps at mid-morning.

Late Thursday, JPMorgan Chase & Co. priced $1.3 billion of 6.1% series AA noncumulative perpetual preferreds, a $25-par issue.

Initial price talk was in the 6.25% area, and the company originally planned to sell $400 million of the preferreds.

J.P. Morgan Securities LLC ran the books.

Come Friday trading, a trader pegged the issue at $24.75 early in the session. Toward the close, another source saw the paper trading at $24.80.

A trader added that the deal was expected to free from the syndicate on Monday.

As for the company’s other issues, the entire preferred structure was softer in the wake of the new deal.

The 6.125% series Y noncumulative preferred stock (NYSE: JPMPF) dipped 2 cents to $25.12.

Meanwhile, Diana Shipping Inc.’s $55 million of 8.5% $25-par notes due 2020 began trading on the New York Stock Exchange on Friday.

The issue came May 20 via Stifel Nicolaus & Co. Inc., Deutsche Bank Securities Inc., Janney Montgomery Scott LLC, BB&T Capital Markets and Wunderlich Securities Inc. The new ticker symbol is “DSXN.”

Paper was trading at $25.20 early in the session but went out at $25.15.

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