CMS Energy sells $25-par notes; Southern California Edison declines; JPMorgan mixed

By James McCandless

San Antonio, Feb. 6 – Preferred stocks were generally lower on Wednesday in the secondary market as the primary market saw one new deal price after being upsized.

CMS Energy Corp. priced an upsized $630 million offering of $25-par junior subordinated notes due March 1, 2079 at par with a coupon of 5.875%.

In the secondary, Southern California Edison, a subsidiary of Edison International, saw its 5.75% and 5.45% cumulative fixed-to-floating rate trust preference securities both decline.

Meanwhile, in finance, JPMorgan Chase & Co.’s recent 6% series EE non-cumulative preferred stock and its 5.75% series DD non-cumulative preferred stock saw mixed results.

Sector peer Goldman Sachs Group, Inc.’s series D floating-rate non-cumulative preferreds fell.

And First Republic Bank’s 5.5% series D non-cumulative perpetual preferred stock followed the negative trend.

Oil and gas name Energy Transfer Partners, LP’s 7.375% series C fixed-to-floating rate cumulative redeemable perpetual preferred units also saw a drop.

CMS prices

CMS Energy priced an upsized $630 million offering of $25-par junior subordinated notes (Baa2/BBB-/BB+) due March 1, 2079 at par with a coupon of 5.875%.

There is no greenshoe.

The deal, announced Wednesday morning, came in well above size talk of $150 million and matched talk for a coupon in the 5.875% area.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The notes are redeemable on or after March 1, 2024 at par. Prior to that, they are redeemable upon changes to tax laws, regulations or interpretations or a ratings agency event.

SoCal Edison declines

Leading secondary trading volume, Southern California Edison’s 5.75% and 5.45% cumulative fixed-to-floating rate trust preference securities both moved downward in Wednesday’s session.

The 5.75% preferreds (NYSE: SCEPrH) lost 31 cents to close at $21.23 on volume of about 681,000 shares.

The 5.45% preferreds (NYSE: SCEPrK) dropped 17 cents to close at $20.84 on volume of about 504,000 shares.

JPMorgan mixed

Elsewhere, in the finance space, JPMorgan’s 6% series EE non-cumulative preferred stock and its 5.75% series DD non-cumulative preferred stock ended mixed.

The series EE preferreds (NYSE: JPMPrC) were down 11 cents to close at $25.67 with about 579,000 shares trading.

The series DD preferreds (NYSE: JPMPrD) were up 1 cent to close at $25.02 with about 520,000 shares trading.

On Tuesday, the preferreds fell 3 cents.

Sector peer Goldman Sachs’ series D floating-rate non-cumulative preferreds were also in decline.

The preferreds (NYSE: GSPrD) shaved off 25 cents to close at $18.34 on volume of about 428,000 shares.

First Republic Bank’s 5.5% series D non-cumulative perpetual preferred stock followed the broader market downward.

The preferreds (NYSE: FRCPrD) saw a 13 cent dip to close at $23.87 with about 386,000 shares trading.

Energy Transfer off

Meanwhile, pipeline name Energy Transfer’s 7.375% series C fixed-to-floating rate cumulative preferred units dropped.

The preferreds (NYSE: ETPPrC) were down 19 cents to close at $24.06 on volume of about 384,000 shares.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.34% at the end of the session, extending a 0.04% loss early Wednesday.

The iShares US Preferred Stock ETF was down 8 cents to $35.78.

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