Morning Commentary: NatWest Group notes eyed; Wells Fargo trails; DiamondRock gains

By James McCandless

San Antonio, Aug. 25 – The preferred market was under pressure early Tuesday as the Wells Fargo Hybrid & Preferred Securities Financial index began down by 0.02%.

The primary space saw NatWest Group plc announce plans to price an offering of fixed-to-fixed reset rate subordinated tier 2 notes due 2035.

BofA Securities, Inc., Morgan Stanley & Co. LLC, NatWest Markets Securities LLC and RBC Capital Markets, LLC are the joint bookrunners.

The notes were talked in the Treasuries plus 260 basis points area.

The coupon is fixed until 2030, when it resets to a fixed rate equal to Treasuries plus a spread.

The notes are redeemable after 10 years at par. Prior to that, the notes are redeemable after a tax event at par.

Moving atop secondary activity, Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferred stock was trailing.

The preferreds (NYSE: WFCPrZ) were down 10 cents to $25.08 on volume of about 83,000 shares.

Elsewhere in the finance space, Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock was being pushed down.

The preferreds (NYSE: COFPrJ) were losing 7 cents to $23.95 with about 54,000 shares trading.

Sector peer JPMorgan Chase & Co.’s 6% series EE non-cumulative preferreds started with a modest gain.

The preferreds (NYSE: JPMPrC) were tacking on 1 cent to $27.90 on volume of about 43,000 shares.

Real estate investment trust DiamondRock Hospitality Co.’s 8.25% series A cumulative redeemable preferred stock was gaining, moving against the morning trend.

The preferreds, trading under the temporary symbol “DRHPP,” were rising 5 cents to $24.75 with about 35,000 shares trading.

Telecom company United States Cellular Corp.’s 7.25% senior notes due 2064 were also skewing positively.

The notes (NYSE: UZC) were picking up 2 cents to $25.71 on volume of about 34,000 notes.

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