First Interstate, First Midwest price; Stifel under par; MetLife preferreds weaker

By James McCandless

San Antonio, May 13 – In the middle of the week, the preferred space continued along a negative trend.

In primary activity, First Interstate BancSystem, Inc. priced a $100 million offering of $1,000-par 10-year fixed-to-floating rate subordinated notes at par with an initial coupon of 5.25% on Wednesday.

Also, First Midwest Bancorp, Inc. priced a $100 million offering of $25-par series A fixed-rate non-cumulative perpetual preferred stock at par with a dividend of 7%.

At the end of secondary trading, Stifel Financial Corp.’s new $200 million 6.125% series C non-cumulative preferred stock finished its first day under par.

Elsewhere in the finance space, Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities trailed.

Sector peer Wintrust Financial Corp.’s recent 6.875% series E fixed-rate reset non-cumulative perpetual preferreds followed the market lower.

Insurance provider MetLife, Inc.’s 4¾% series F non-cumulative preferred stock finished the session weaker.

Meanwhile, telecom services name AT&T Inc.’s 4.75% series C perpetual preferred stock dipped.

First Interstate prices

In Wednesday primary activity, First Interstate priced a $100 million offering of $1,000-par 10-year fixed-to-floating rate subordinated notes (Kroll: BBB) at par with an initial coupon of 5.25%.

The deal came at the high end of price talk of $50 million to $100 million.

Piper Sandler & Co. is the bookrunner.

The notes will have a coupon of 5.25% until May 15, 2025, which then converts to a floating rate based on the SOFR plus 518 basis points.

The notes will be callable on or after May 15, 2025 at par. Prior to that, the notes are redeemable after a change in law that would prevent the company from deducting interest payable from the notes or if the company is required to register as an investment company.

First Midwest’s deal

Also, First Midwest priced a $100 million offering of $25-par series A fixed-rate non-cumulative perpetual preferred stock (Ba1/BB-) at par with a dividend of 7%.

BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are the bookrunners.

Dividends are payable on Feb. 20, May 20, Aug. 20 and Nov. 20, starting on Aug. 20, 2020.

The preferreds are redeemable on or after Aug. 20, 2025. Prior to that, the preferreds are redeemable within 90 days after a regulatory capital treatment event.

Stifel under par

At the end of secondary trading, Stifel Financial’s new $200 million 6.125% series C non-cumulative preferred stock finished its first trading day under par.

The preferreds, trading under the temporary symbol “STFLL,” closed at $24.90 on volume of about 2.1 million shares.

The deal priced on Tuesday.

Elsewhere in the finance space, Ally Financial’s 8.125% series 2 fixed-to-floating rate trust preferred securities trailed.

The preferreds (NYSE: ALLYPrA) declined by 55 cents to close at $21.22 with about 547,000 shares trading.

On Tuesday, the preferreds rose 8 cents.

Sector peer Wintrust’s recent 6.875% series E fixed-rate reset non-cumulative perpetual preferreds followed the market lower.

The preferreds, trading under the temporary symbol “WTFNL,” shaved off 20 cents to close at $24.85 on volume of about 479,000 shares.

On Tuesday, the preferreds trailed by 4 cents.

MetLife weaker

Insurance provider MetLife’s 4¾% series F non-cumulative preferred stock finished the session in a weaker position.

The preferreds (NYSE: METPrF) chalked off 2 cents to close at $24.53 with about 432,000 shares trading.

AT&T dips

Meanwhile, telecom services name AT&T’s 4.75% series C perpetual preferred stock dipped.

The preferreds (NYSE: TPrC) lost 9 cents to close at $22.80 on volume of about 304,000 shares.

On Tuesday, the preferreds were docked 2 cents.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index capped the day down by 1.05%, wider than the 0.29% loss from early Wednesday trading.

The iShares US Preferred Stock ETF was down 45 cents to $33.65.

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