Morning Commentary: JPMorgan prices; Wells Fargo at par; MetLife preferreds rising

By James McCandless

San Antonio, Jan. 16 – New issuance was the focus of the preferred market Thursday morning as the Wells Fargo Hybrid & Preferred Securities Financial index opened down by 0.12%.

In primary activity, JPMorgan Chase & Co. priced $3 billion of $1,000-par series HH fixed-to-floating rate non-cumulative preferred stock at par with an initial dividend of 4.6%.

There is no greenshoe.

The deal was announced on Wednesday morning.

J.P. Morgan Securities LLC is the bookrunner.

The dividend is fixed until Feb. 1, 2025, then converts to a floating rate of three-month SOFR plus 312.5 basis points.

The preferreds are redeemable on or after Feb. 1, 2025 at par. Prior to that, the preferreds are redeemable within 90 days after a capital treatment event at par.

Also, Citigroup Inc. priced a $1.5 billion offering of $1,000-par series V fixed-to-floating rate non-cumulative preferred stock (Ba1/BB+/BB+/BBBH) with an initial dividend of 4.7%, according to an FWP filing with the Securities and Exchange Commission.

There is no greenshoe.

Citigroup Global Markets Inc. is the bookrunner.

The dividend is fixed until Jan. 30, 2025, then converts to a floating rate of three-month SOFR plus 323.4 bps.

The preferreds are redeemable on or after Jan. 30, 2025. Prior to that, the preferreds are redeemable within 90 days after a regulatory capital event at par.

Leading in the secondary space, Wells Fargo & Co.’s new $1.75 billion 4.75% series Z non-cumulative perpetual class A preferred stock was straddling par on its first day.

The preferreds, trading under the temporary symbol “WFCZL,” were seen trading at $25.00 on volume of about 11.4 million shares.

Elsewhere in the finance space, Bank of America Corp.’s 5% series LL non-cumulative preferred stock started the session on the negative side.

The preferreds (NYSE: BACPrN) were down 1 cent to $25.69 with about 50,000 shares trading.

Sector peer Capital One Financial Corp.’s 5% series I fixed-rate non-cumulative perpetual preferred stock opened with a modest gain.

The preferreds (NYSE: COFPrI) were tacking on 1 cent to $25.29 on volume of about 45,000 shares.

Meanwhile, insurance provider MetLife, Inc.’s recent 4.75% series F non-cumulative preferreds were rising as the day kicked off.

The preferreds, trading under the temporary symbol “METFL,” were improving by 4 cents to $25.34 with about 77,000 shares trading.

Telecom services name AT&T Inc.’s 5% series A perpetual preferred stock was under pressure, mirroring the broader market.

The preferreds (NYSE: TPrA) were off by 1 cent to $25.79 on volume of about 32,000 shares.

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