Morning Commentary: Park National prices; Prudential on deck; Farmer Mac improves

By James McCandless

San Antonio, Aug. 18 – The Tuesday session in the preferred market opened with more gains as the Wells Fargo Hybrid & Preferred Securities Financial index moved up by 0.10%.

In primary market maneuvers, Park National Corp. priced a $175 million offering of $1,000-par fixed-to-floating rate subordinated notes (Kroll: BBB-) due Sept. 1, 2030 with an initial coupon of 4.5% at par on Monday.

Piper Sandler & Co. is the bookrunner.

The coupon is fixed until Sept. 1, 2025, then converts to a floating rate of the three-month SOFR plus 439 basis points.

Also, Prudential Financial, Inc. announced plans to price an offering of $25-par junior subordinated notes due Sept. 1, 2060.

Wells Fargo Securities, LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC and UBS Securities LLC are the bookrunners.

The notes are redeemable on or after Sept. 1, 2025 at par. Prior to that, the notes are redeemable within 90 days after a tax event or regulatory capital event at par or 90 days after a rating agency event at 102%.

Concurrently, the company also plans to sell $1,000-par fixed-to-fixed reset rate junior subordinated notes due Oct. 1, 2050.

Wells Fargo, Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley and Mizuho Securities USA LLC are the bookrunners.

On Oct. 1, 2030 and every five years thereafter, the coupon coverts to a fixed rate equal to the Treasury rate plus a spread.

Pushing up at the top of the secondary market, rural lender Federal Agricultural Mortgage Corp.’s new 5.25% series F non-cumulative perpetual preferred stock was also improving.

The preferreds, trading under the temporary symbol “AGMFP,” were shifting up 9 cents to $25.27 on volume of about 130,000 shares.

Meanwhile, asset manager Legg Mason, Inc.’s 5.45% junior subordinated notes due 2056 were gaining ground.

The notes (NYSE: LMHB) were up 10 cents to $25.69 with about 86,000 notes trading.

Pennsylvania Real Estate Investment Trust’s 7.2% series C cumulative redeemable perpetual preferreds followed the morning’s trend.

The preferreds (NYSE: PEIPrC) were picking up 11 cents to $4.89 on volume of about 84,000 shares.

Elsewhere, in the finance space, Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock was on the rise.

The preferreds (NYSE: COFPrJ) were adding 5 cents to $23.71 with about 60,000 shares trading.

Sector peer JPMorgan Chase & Co.’s 5.75% series DD non-cumulative preferred stock was also seeing higher ground.

The preferreds (NYSE: JPMPrJ) were tacking on 3 cents to $27.51 on volume of about 47,000 shares.

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