Preferred stocks mixed as week closes; PS Business lists on NYSE; Colony, TCF active

By Stephanie N. Rotondo

Seattle, Sept. 22 – Going into the end of the week, the preferred stock market was trading mixed as the broader markets drifted downward amid growing tensions between the United States and North Korea.

North Korea said it was considering testing a hydrogen bomb in the Pacific Ocean, which was a response to comments made by president Donald Trump at the United Nations earlier in the week. In his remarks, Trump indicated he was willing to use force on the reclusive nation.

The Wells Fargo Hybrid and Preferred Securities index finished the day up 12 basis points. The U.S. iShares Preferred Stock ETF, however, waned 10 bps.

More recently priced issues were getting listed on Friday, with PS Business Parks Inc.’s $200 million of 5.25% series X cumulative preferred stock being the latest to join the New York Stock Exchange. The ticker is “PSBPrX.”

Paper was trading at $25.12 at the close, down 13 cents.

The issue priced on Sept. 12. The $25-par deal was increased from an expected $100 million. Price talk was 5.25% to 5.375%.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the joint bookrunners.

Meanwhile, deals priced earlier in the month were on the active side – relatively speaking, as overall trading was limited.

One such issue was Colony NorthStar Inc.’s 7.125% series J cumulative redeemable preferreds, which were holding steady at $25.03.

The company initially sold $275 million of the preferreds on Sept. 13. A $40 million greenshoe was exercised on Monday, bringing the total amount outstanding to $315 million.

The size of the deal was increased from $100 million.

BofA Merrill Lynch, Morgan Stanley, J.P. Morgan Securities LLC, UBS Securities LLC and RBC Capital Markets LLC were the bookrunners.

Another busy issue was TCF Financial Corp.’s 5.7% series C noncumulative perpetual preferred stock.

The paper was up a dime at $25.29.

The $175 million deal came Sept. 7 via Morgan Stanley and UBS Securities.

As for deals from the current week, the Gabelli Multimedia Trust Inc.’s $50 million of 5.125% series E cumulative preferreds – a deal priced Thursday via BofA Merrill Lynch and UBS Securities – were pegged at $25.08, up 3 cents.

The issue freed to trade, getting a temporary ticker of “GBBLP.”

G.research LLC also participated in the offering.

From Monday’s business, Georgia Power Co.’s $270 million of 5% $25-par series 2017A junior subordinated notes due 2077 were seen with a volume weighted average price of $25.11.

That was down 2 cents from the previous day, according to a market source.

BofA Merrill Lynch, Morgan Stanley, UBS Securities and Wells Fargo were the bookrunners.

Away from new issues, Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) actually dominated the day, though there was no fresh news out to cause the activity.

Additionally, there was very little activity in sector peer Freddie Mac.

Fannie’s preferreds finished the session at $7.00, up a nickel.

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