Midday Commentary: Bevy of new preferred issues pushes market down; M&T prices; JPMorgan to come

By Stephanie N. Rotondo

Phoenix, Aug. 20 - Preferred stocks were "off a little bit" as Monday's session got underway, a trader said.

He speculated that the soft tone was due to investors "probably just absorbing the extra [new issue] supply."

The new issue calendar is expected to remain active during the week. On Monday, three new deals were announced.

First, the Department of the Treasury priced late Friday a $381.5 million sale of series A and C fixed-rate cumulative preferreds issued to the agency by M&T Bank Corp. under the Troubled Asset Relief Program.

The $1,000-par securities were priced at par. A trader said both series were bid for at par.

A planned amendment will result in the initial 5% dividend rising on Nov. 14, 2013 for both series to 6.375%. The amendment will allow for a redemption of the preferreds at any time on or after Nov. 15, 2018 or within 90 days of a regulatory capital treatment event.

M&T will apply to list the securities on the New York Stock Exchange under the ticker symbols "MTBP" and "MTBPC," respectively. Settlement is expected Tuesday.

Bank of America Merrill Lynch, Sandler O'Neill + Partners, LP, RBC Capital Markets, LLC and Stifel, Nicolaus & Co., Inc. are the joint bookrunning managers. The co-managers are MR Beal & Co. and Rice Securities LLC.

Buffalo-based M&T will not receive any proceeds from the sale of these securities.

JPMorgan to price

JPMorgan Chase & Co. is planning to issue at least $500 million of series O noncumulative preferred stock.

Price talk was around 5.625%, according to a trader, but has been revised to 5.5%. Pricing could come Monday.

The trader saw the issue trading at $24.87 in the gray market at midday, though he added that the paper had traded as high as $24.98.

J.P. Morgan Securities LLC is the bookrunning manager. Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint lead managers.

The New York-based bank will apply to list the new series of preferreds on the New York Stock Exchange.

Proceeds will be used for general corporate purposes, including the repayment of debt, investments in or extensions of credit to subsidiaries, redemptions or possible acquisitions.

WSFS plans $25-par notes

WSFS Financial Corp. intends to issue at least $35 million of $25-par senior notes due 2019.

A trader said he had seen no markets in the new deal, noting that it is on the smaller side.

The company will apply to list the notes on the Nasdaq Global Select Market.

Sandler O'Neill is the bookrunning manager. The co-lead manager is Keefe Bruyette & Woods Inc. The co-managers are Boenning & Scattergood, Inc. and Janney Montgomery Scott LLC.

Proceeds will be used for general corporate purposes, including to support anticipated balance sheet growth, which may include loan originations and securities purchases. The company may also use the funds to repurchase or redeem all or a portion of its series A preferred stock, subject to regulatory approval.

WSFS is a Wilmington, Del.-based savings and loan holding company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.