Morning Commentary: New Residential preps offering; Annaly Capital flat; Athene up

By James McCandless

San Antonio, June 25 – The preferred space started the session with active trading in the secondary market but with few names making big moves in one direction or another. The Wells Fargo Hybrid & Preferred Securities Financial index started up by 0.01%.

In primary activity, New Residential Investment Corp. plans to price an offering of $25-par series A fixed-to-floating rate cumulative redeemable preferred stock.

BofA Securities, Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, UBS Securities LLC, Citigroup Global Markets Inc. and Keefe, Bruyette & Woods, Inc. are the joint bookrunners.

The preferreds are redeemable on or after Aug. 15, 2024. Prior to that, they are redeemable within 120 days after a change-of-control event.

The dividend is fixed until Aug. 15, 2024, then converts to Libor plus a spread.

Leading early volume, Annaly Capital Management, Inc.’s new 6.75% series I fixed-to-floating rate cumulative redeemable perpetual preferred stock was rigid as the session kicked off.

The preferreds, trading under the temporary symbol “ACAXP,” were flat so far at $24.74 on volume of about 404,000 shares.

In the retirement space, Athene Holding Ltd.’s 6.35% series A fixed-to-floating rate perpetual non-cumulative preference shares were moving up slightly.

The preferreds (NYSE: ATHPrA) started up 2 cents to $26.11 with about 112,000 shares trading.

Insurance provider Brighthouse Financial, Inc.’s 6.6% series A non-cumulative perpetual preferreds were sinking.

The preferreds (Nasdaq: BHFAP) fell 53 cents to $25.95 on volume of about 94,000 shares.

The drop comes in reaction to analysts downgrading the name Tuesday morning, arguing that the prospect of lower interest rates could mean lower revenues by $1 billion over three years.

Elsewhere, in the finance space, Oaktree Capital Group, LLC’s 6.55% series B non-cumulative preferred units were gaining.

The preferreds (NYSE: OAKPrB) were better by 5 cents to $25.96 with about 42,000 shares trading.

Utilities name Duke Energy Corp.’s 5.75% series A cumulative redeemable perpetual preferreds were also relatively active but flat.

The preferreds (NYSE: DUKPrA) were level at $26.39 on volume of about 29,000 shares.

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