JPMorgan’s new deal perks up, frees to trade; NuStar weak; Fannie, Freddie stay firm

By Stephanie N. Rotondo

Phoenix, July 23 – A new preferred stock issue from JPMorgan Chase & Co. was moving up Thursday and freed to trade later in the day.

The $1.1 billion issue of 6.15% series BB noncumulative preferreds – a deal that came Wednesday upsized from $400 million – was pegged at $24.80 early in the session and was seen closing at $24.82.

The New York-based bank’s other issues were also trending higher.

The (NYSE: JPMPG) improved 7 cents to $25.02, while the (NYSE: JPMPF) rose 3 cents to $25.23.

The new issue was also deemed the day’s most actively traded paying security.

Dividends will be payable quarterly. The preferreds become redeemable on or after Sept. 1, 2020 at par plus accrued dividends.

Additionally, the bank can redeem the preferreds in whole within 90 days of a regulatory capital treatment event.

Proceeds will be used for general corporate purposes.

The J.P. Morgan Securities LLC-led deal was improving even as the market overall remained soft.

The Wells Fargo Hybrid and Preferred Securities index was off 7 basis points at mid-morning but “almost fully recovered,” a market source said, ending down 3 bps.

Secondary trading thin

A market source noted that the day’s volume in the secondary space was “very light.”

NuStar Logistics LP’s 7.625% $25-par fixed-to-floating rate subordinated notes due 2043 (Nasdaq: NSS) were following the day’s downward trend, slipping 15 cents to $26.81.

Over 569,000 shares changed hands.

The firm’s parent company, NuStar Energy LP, is slated to release earnings on Friday.

Meanwhile, Fannie Mae and Freddie Mac preferreds continued to climb up in the wake of news regarding a recent court ruling that will force the federal government to turn over more than 10,000 documents related to the decision to place the GSEs into conservatorship.

That decision is believed to be a boon for shareholders.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 6 cents to $4.50. Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were up a penny at $4.46.

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