First Internet sells $25-par notes; Gabelli Dividend preferreds top par; NiSource lower

By James McCandless

San Antonio, June 5 – Top traders in the preferred space trended downward despite a positive swing in the broader market.

In primary activity, First Internet Bancorp priced an upsized $35 million of fixed-to-floating rate subordinated notes due 2029 at par with an initial coupon at 6%.

Leading secondary trading volume, Gabelli Dividend & Income Trust’s new $50 million 5.375% series H cumulative preferred stock closed its first day above par.

Meanwhile, in utilities, NiSource, Inc.’s 6.5% series B fixed-rate reset cumulative redeemable perpetual preferred stock closed lower.

Sector peer Duke Energy Corp.’s 5.75% series A cumulative redeemable perpetual preferreds were also under pressure.

Insurance provider Allstate Corp.’s 5.1% fixed-to-floating rate subordinated debentures due 2053 saw an uptick.

Elsewhere, AGNC Investment Corp.’s 6.875% series D fixed-to-floating rate cumulative redeemable preferred stock was weaker.

First Internet prices

In primary activity, First Internet priced an upsized $35 million of fixed-to-floating rate subordinated notes due 2029 at par with an initial coupon at 6%.

There is a $2 million greenshoe.

The deal, announced Wednesday morning, was upsized from an initial $30 million and came in under talk of a coupon in the 6.125% area.

Keefe, Bruyette & Woods, Inc. is the bookrunner.

The notes are redeemable on or after June 30, 2024. Prior to that, they are redeemable after a regulatory capital treatment event.

The coupon is fixed until June 30, 2024, then converts to a floating rate of Libor plus 411.4 basis points.

Gabelli above par

In the secondary market, Gabelli’s new $50 million 5.375% series H cumulative preferred stock finished its first session above par.

The preferreds, trading under the temporary symbol “GDVVP,” were seen closing at $25.12 on volume of about 532,000 shares.

The deal priced on Tuesday.

NiSource negative

Meanwhile, in the utilities space, NiSource’s 6.5% series B fixed-rate reset cumulative redeemable perpetual preferred stock closed the day negative.

The preferreds (NYSE: NIPrB) were down 9 cents to end at $26.60 with about 457,000 shares trading.

Sector peer Duke Energy’s 5.75% series A cumulative redeemable perpetual preferreds were also under pressure.

The preferreds (NYSE: DUKPrA) fell 11 cents to close at $26.35 on volume of about 297,000 shares.

Allstate gains

In insurance, Allstate’s 5.1% fixed-to-floating rate subordinated debentures due 2053 saw an uptick during Wednesday activity.

The debentures (NYSE: ALLPrB) rose 3 cents to close at $25.46 with about 256,000 securities trading.

AGNC weaker

Real estate investment trust AGNC’s 6.875% series D fixed-to-floating rate cumulative redeemable preferred stock closed the session weaker.

The preferreds (Nasdaq: AGNCM) dropped 8 cents to close at $25.18 on volume of about 219,000 shares.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.02% at the end of the day, not moving far from the 0.03% gain in early Wednesday trading.

The iShares US Preferred Stock ETF was up 5 cents to $36.59.

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