Morning Commentary: Preferreds firm as midweek session begins; JPMorgan struggles to hit par

By Stephanie N. Rotondo

Phoenix, June 18 – Preferred stocks were ticking higher in early midweek trading, according to the Wells Fargo Hybrid and Preferred Securities index.

The index was up 7 basis points at mid-morning.

Though the market had a firm tone, JPMorgan Chase & Co.’s $850 million of 6.3% series W noncumulative perpetual preferreds continued to languish below par.

A trader quoted the issue at $24.63 bid, $24.70 offered.

The deal priced Monday and freed up Tuesday afternoon. The new issue came upsized from $400 million and tightened from original talk of 6.375% to 6.5%.

A trader also noted that National General Holdings Corp.’s planned offering of at least $100 million series A noncumulative preferreds “should price today.”

He said talk was holding in at 7.5% to 7.625%.

Morgan Stanley & Co. LLC and UBS Securities LLC are the bookrunners.

As for the Federal Agricultural Mortgage Corp.’s $75 million issue of 6% fixed-to-floating rate noncumulative preferreds, those were pegged at $24.80 bid at mid-morning.

The Farmer Mac preferreds priced Tuesday. The dividend begins floating July 18, 2024 at Libor plus 326 bps.

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