Preferreds give up gains; JPMorgan’s recent deal rises; Triangle lists; UBS posts profit, rises

By Stephanie N. Rotondo

Phoenix, Feb. 10 – A trader said the preferred stock market was “moving sideways” as the “long bond whipped back and forth” and oil prices were in retreat.

The Wells Fargo Hybrid and Preferred Securities index ended down 13 basis points after rising 18 bps in the previous session.

With all the uncertainty in the broader market, the new issue space continued to be quiet.

“It’s hard to say if [issuers are] trying to get a better feel for the market or what,” a trader said.

In recent deals, JPMorgan Chase & Co.’s $1.2 billion of 6.125% series Y noncumulative preferreds were deemed the most active issue of the day, and the paper ended at $24.91, up 6 cents. The issue priced Feb. 5.

A trader had quoted the shares at $24.90 bid, $24.92 offered earlier in the session.

The New York-based bank said in a regulatory filing on Monday that its $180 million greenshoe had been exercised, lifting the total amount outstanding to $1.38 billion.

Also, Triangle Capital Corp.’s $75 million of 6.375% $25-par notes due March 15, 2022 began trading on the New York Stock Exchange Tuesday under the ticker symbol “TCCB.” That issue priced Feb. 4.

The notes were trading at $25.24 versus par opening levels and an intraday high of $25.25.

UBS up on earnings

UBS AG’s floating-rate noncumulative trust preferred securities (NYSE: UBSPD) jumped in Tuesday trading after the company reported earnings.

The preferreds closed at $19.47, up 17 cents.

For the fourth quarter, the Zurich-based bank reported a net profit of CHF 963 million, compared with CHF 917 million the year before. A tax gain of CHF 493 million helped push the bottom line above analysts’ expectations of CHF 792 million.

Despite a decent performance at the company’s investment banking unit during the quarter, a not-so-strong showing at the wealth management division, the bank’s core business, worried investors, and the common stock was pushed lower.

Pretax operating profit at the wealth management unit increased 37% year over year to CHF 646 million. However, European client outflows were outweighing Asian client inflows, and net new money for the quarter was CHF 3 billion – below the company’s target range and down CHF 5.8 billion from the previous year.

At the investment bank, pretax operating profit was CHF 367 million, up 24% from the year before.

Ally trades higher

Ally Financial Inc.’s preferred stock was trending higher in active trading on Tuesday.

“I’m guessing somebody was doing a swap between the two sides,” one market source said of the gains, noting that one issue was up more than the other.

The 8.125% series 2 fixed-to-floating-rate trust preferred securities (NYSE: ALLYPA) rose 3 cents to $26.36, while the 8.5% series A fixed-to-floating-rate perpetual preferreds (NYSE: ALLYPB) increased 13 cents to $26.40.

The source also noted that the Detroit-based lender had announced a tender offer for its bonds due 2020 and 2031. He said that the strong end in the preferreds might have something to do with that if investors are speculating that the company will redeem or exchange its preferreds in the near term.

“They need to,” the source said. “They have too much outstanding.”

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