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JPMorgan’s new 6.15% deal widens, frees to trade; Capital One paper gyrates following earnings
By Stephanie N. Rotondo
Phoenix, July 24 – The preferred stock market was again soft as trading got underway on Friday but reversed course by the end of the day to finish in positive territory.
The Wells Fargo Hybrid and Preferred Securities index closed 5 basis points higher. The index was off 4 bps at mid-morning.
In recent issues, JPMorgan Chase & Co.’s new $1.1 billion issue of 6.15% series BB noncumulative preferreds, a deal that priced Wednesday via J.P. Morgan Securities LLC, was quoted at $24.76 bid, $24.82 offered.
That was slightly off from Thursday’s closing levels in a $24.80 to $24.82 range.
The issue freed to trade shortly before noon, according to a market source.
The deal was upsized from $400 million. Price talk was initially around 6.25% but was later revised to 6.1%.
Away from recent issues, Capital One Financial Corp.’s preferreds were following the rollercoaster trend of the day. The shares initially came in as the market reacted to the company’s latest earnings release but closed in the green.
The 6.25% series C noncumulative perpetual preferreds (NYSE: COFPC) improved 6 cents to end at $25.76. The issue was down a nickel at $25.65 at mid-morning.
The 6% series B noncumulative perpetual preferreds (NYSE: COFPP) finished 4 cents higher at $25.22. The paper was 4 cents weaker at $25.14 earlier in the session.
For the quarter, the credit card servicer and banking institution reported a net profit of $863 million, or $1.50 per share, compared with earnings of $1.2 billion, or $2.04 per share, the year before.
On an adjusted basis, earnings per share came to $1.78.
Revenue, however, improved 3.7% to $5.67 million.
Analysts polled by Thomson Reuters had forecast adjusted EPS of $1.97 on revenue of $5.74 billion.
Additionally, Capital One announced layoffs in Virginia, Oregon and South Dakota.
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