Citizens Financial taps market; new JPMorgan preferreds mixed; AmTrust Financial tanks

By James McCandless

San Antonio, Jan. 22 – The start of a holiday-shortened week in the preferred stock market began with one new deal in the primary market and secondary trading that trended downward.

Citizens Financial Group, Inc. priced $300 million of $25-par series D fixed-to-floating rate non-cumulative perpetual preferred stock with an initial dividend of 6.35%.

In the secondary, JPMorgan Chase & Co.’s recent 6% series EE non-cumulative preferred stock declined, leading trading volume again.

Its 5.75% series DD non-cumulative preferred stock improved.

Elsewhere in finance, Wells Fargo & Co.’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual class A preferreds declined.

Meanwhile, insurer AmTrust Financial Services, Inc.’s 6.95% series F and 7.625% series C non-cumulative preferred stock both crashed after announcing Friday that it would delist its preferred structure.

Real estate Investment trust Chimera Investment Corp.’s recent 8% series D fixed-to-floating rate cumulative redeemable preferred stock fell.

In utilities, Southern California Edison Co., a subsidiary of Edison International, saw its 5.75% cumulative fixed-to-floating rate trust preference securities also drop.

Citizens prices

Citizens Financial priced $300 million of $25-par series D fixed-to-floating rate non-cumulative perpetual preferred stock with an initial dividend of 6.35%.

The deal was announced Tuesday morning.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, Wells Fargo Securities, LLC and Citizens Capital Markets, Inc. are the joint bookrunners.

The preferreds are redeemable on or after April 6, 2024 at par. Prior to that, they are redeemable within 90 days following a regulatory capital treatment event.

The dividend is fixed until April 6, 2024, then converts to Libor plus a spread.

JPMorgan mixed

In the secondary market, JPMorgan’s recent 6% series EE non-cumulative preferred stock was in decline, leading volume for the third straight day.

The preferreds, trading under the temporary symbol “JPEEL,” were down 5 cents to close at $25.15 on volume of about 3.4 million shares.

On Friday, the preferreds rose 5 cents.

The company’s more established 5.75% series DD non-cumulative preferred stock moved higher on Tuesday.

The preferreds (NYSE: JPMPrD) were up 5 cents to close at $25.02 on volume of about 376,000 shares.

On Friday, the preferreds gained 2 cents.

Elsewhere in the finance space, Wells Fargo’s 5.85% series Q fixed-to-floating rate non-cumulative perpetual class A preferreds trended negative.

The preferreds (NYSE: WFCPrQ) dropped 13 cents to close at $25.11 with about 278,000 shares trading.

On Tuesday, the preferreds jumped 27 cents.

AmTrust crashes

Elsewhere in the insurance space, AmTrust’s 6.95% series F and 7.625% series C non-cumulative preferred stock both plummeted in the Tuesday session.

The series F preferreds (NYSE: AFSIPrF) dropped $5.24 to close at $8.94 on volume of about 408,000 shares.

The series C preferreds (NYSE: AFSIPrC) declined $6.46 to close at $9.50 on volume of about 363,000 shares.

Last Thursday, the company announced that it would delist and deregister all series of its preferred structure.

In a Securities and Exchange Commission filing, the company said that the move was due to “the administrative costs and burdens associated with maintaining the listings on the NYSE,” arguing that the costs outweigh the benefits.

Chimera off

Real estate investment trust Chimera’s recent 8% series D fixed-to-floating rate cumulative redeemable preferreds were also falling.

The preferreds, trading under the temporary symbol “CMIMP,” were lower by 5 cents to $24.70 with about 246,000 shares trading.

SoCal Edison lower

Meanwhile, Electric utility Southern California Edison’s 5.75% cumulative fixed-to-floating rate trust preference securities declined.

The preferreds (NYSE: SCEPrH) ended lower by 33 cents to close at $21.50 on volume of about 219,000 shares.

On Tuesday, Fitch Ratings lowered Edison International and subsidiary Southern California Edison’s short-term issuer default ratings.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.16% at the close, holding near the 0.15% decline seen in early trading.

The iShares US Preferred Stock ETF was down 7 cents to $35.43.

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