Midday Commentary: CoBank sells preferreds; JPMorgan, First Republic plan noncumulative offerings

By Stephanie N. Rotondo

Phoenix, April 16 - New preferred stock issues were churning out Tuesday, but a trader said investors were sitting on the sidelines for the most part.

There were "not many markets" for CoBank ACB's new $200 million issue of 6.125% $100-par series G noncumulative perpetual preferreds, a deal that came late Monday. The trader said he was seeing par bids but no offers for the paper.

As for Tuesday business, JPMorgan Chase & Co. announced an offering of $1,000-par series Q fixed-to-floating rate noncumulative perpetual preferreds.

"It's been quiet in that one too," the trader said.

And, First Republic Bank said it was selling at least $150 million of $25-par series D noncumulative perpetual preferreds.

Price talk was around 5.625%.

As soon as that deal was announced, a trader said he saw less 40 cent and less 35 cent bids for the paper, though he noted that activity was thin. He opined that the bookrunners were "gauging demand" before really putting it out there.

At midday, the most recent market for the preferreds was $24.87 bid, $24.94 offered in the gray. "So it's holding up well," he said.

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