Preferreds up; Huntington Bancshares sells $500 million preferreds; Wells Fargo active

By Abigail W. Adams

Portland, Me., Feb. 27 – Preferreds continued to see gains on Tuesday even as the broader equity markets saw losses.

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.09% in early trading Tuesday. The gains continued throughout the session with the index closing up 0.12%.

The U.S. iShares Preferred Stock ETF was up 0.02% in early trading. The ETF also continued to see gains and closed Tuesday up 0.11%.

After a lull in primary market activity for much of February, the primary market was active on Tuesday.

Huntington Bancshares Inc. priced $500 million of 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock after the market close Tuesday.

The preferred stock will be sold as depositary shares with a liquidation preference of $1,000 per share, representing a 1/100th interest in the series E preferred stock, according to the preliminary prospectus.

The offering from the Columbus, Ohio-based diversified regional bank holding company is the second preferred stock deal to price in February.

Some of Wells Fargo & Co.’s preferreds saw high-volume trading on Tuesday as the San Francisco-based banking and financial services holding company was again the subject of headlines. After starting the day with gains, the preferreds ended the day mixed.

Huntington’s deal

Huntington Bancshares priced $500 million of 5.7% series E fixed-to-floating rate non-cumulative perpetual preferred stock (expected Baa3/BB/BB) at par after the market close on Tuesday.

Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Huntington Capital Markets are the joint bookrunners for the offering.

Dividends will be payable quarterly upon the authorization of the board of directors. The depositary shares will carry a fixed dividend of 5.7% until April 15, 2023.

It will then switch to a floating rate of Libor plus a spread of 288 bps, according to the deal’s term sheet.

Wells Fargo mixed

Wells Fargo’s preferreds were again active on Tuesday with the company’s depositary shares mixed in high-volume trading.

Wells Fargo’s depositary shares representing 5.85% series Q fixed-to-floating rate non-cumulative perpetual preferred stock was up 4 cents, or 0.13%, to $26.52 shortly after noon ET.

The series Q preferred stock was unable to hold onto its early gains and ended the day at $26.48, a decrease of 0.02%.

Wells Fargo’s depositary shares representing 8% series J non-cumulative perpetual preferred stock were up 2 cents, or 0.08%, to $25.79 early in Tuesday’s session.

The depositary shares were unable to hold onto their early gains but still closed Tuesday up at $25.80, an increase of 3 cents, or 0.12%.

Wells Fargo’s depositary shares representing 5.2% series N non-cumulative perpetual preferred stock closed Tuesday at $24.39, an increase of 11 cents, or 0.47%.

Wells Fargo was again in the headlines on Tuesday with Sacramento filing a federal lawsuit against the San Francisco-based banking and financial services holding company alleging discriminatory lending practices and the bank closing one of its branches in Charlotte, N.C.

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