Morning Commentary: BayCom prices; Equitable Holdings eyed; Legg Mason $25-pars lower

By James McCandless

San Antonio, Aug. 6 – The preferred market began Thursday on the rise as the Wells Fargo Hybrid & Preferred Securities Financial index started up by 0.05%.

The primary market opened up with BayCom Corp. pricing a $65 million offering of $1,000-par fixed-to-floating rate subordinated notes due Sept. 15, 2030 with an initial coupon of 5.25% on Thursday.

The deal, announced on Monday, was upsized from an initial $50 million.

Janney Montgomery Scott LLC and D.A. Davidson & Co. are the bookrunners.

The coupon is fixed until Sept. 15, 2025, then converts to a floating rate of the three-month SOFR plus 521 basis points.

Also, Equitable Holdings, Inc. announced plans to price a $300 million offering of $1,000-par series B fixed-rate reset non-cumulative perpetual preferred stock with a dividend in the 5.25% area.

Wells Fargo Securities, LLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the bookrunners.

The dividend resets on Dec. 15, 2025 and every five years thereafter to the Treasury rate plus a spread.

The preferreds are redeemable within three months of any reset date at par, within 90 days after a regulatory capital event at par or within 90 days after a rating agency event at $25.50.

Leading the secondary early, asset manager Legg Mason, Inc.’s 5.45% junior subordinated notes due 2056 were under pressure.

The notes (NYSE: LMHB) were down 4 cents to $25.05 on volume of about 141,000 notes.

Utilities provider Just Energy Group, Inc.’s 8.5% series A fixed-to-floating rate cumulative redeemable perpetual preferreds were also skewing negative.

The preferreds (NYSE: JEPrA) were off 5 cents to $0.80 with about 42,000 shares trading.

Meanwhile, in the finance space, Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities were relatively active but unchanged so far.

The preferreds (NYSE: ALLYPrA) were holding level at $24.37 on volume of about 40,000 shares.

Property owner Monmouth Real Estate Investment Corp.’s 6.125% series C cumulative redeemable preferred stock was also trailing as the session kicked off.

The preferreds (NYSE: MNRPrC) were shaving off 7 cents to $25.45 with about 38,000 shares trading.

Elsewhere, insurance carrier Argo Group International Holdings, Ltd.’s 7% resettable fixed-rate preference shares were improving.

The preferreds (NYSE: ARGOPrA) were picking up 12 cents to $25.15 on volume of about 37,000 shares.

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