Morning Commentary: OceanFirst Financial preferreds on tap; JPMorgan, AT&T improve

By James McCandless

San Antonio, April 30 – While the preferred space started Thursday on a decline with the Wells Fargo Hybrid & Preferred Securities Financial index down by 0.13%, top traders were climbing.

In the primary market, OceanFirst Financial Corp. announced plans to price an offering of $25-par series A fixed-to-floating rate non-cumulative perpetual preferred stock.

Piper Sandler & Co. and Raymond James & Associates, Inc. are the joint bookrunners.

The dividend is fixed for five years, then converts to a rate of three-month SOFR plus a spread.

The preferreds are redeemable after five years. Prior to that, the preferreds are redeemable within 90 days after a regulatory capital treatment event.

A day earlier, OceanFirst Financial separately priced a $125 million offering of $1,000-par 10-year fixed-to-floating rate subordinated notes with a coupon of 5.25%.

Piper Sandler was the bookrunner.

The coupon is fixed for until May 15, 2025, then converts to a floating rate of the three-month SOFR plus 509.5 basis points.

The notes are redeemable on or after May 15, 2025 at par. Prior to that, the notes are redeemable after a tax event, a tier 2 capital event, or if the company is required to register as an investment company at par.

Leading in secondary activity, JPMorgan Chase & Co.’s 5.75% series DD non-cumulative preferred stock saw positivity.

The preferreds (NYSE: JPMPrD) were up 3 cents to $26.65 on volume of about 54,000 shares.

Elsewhere in the finance space, Bank of America Corp.’s 5% series LL non-cumulative preferred stock was also gaining ground.

The preferreds (NYSE: BACPrN) were picking up 12 cents to $25.12 with about 37,000 shares trading.

Sector peer Ally Financial, Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities were also on an upward track.

The preferreds (NYSE: ALLYPrA) were improving by 12 cents to $23.12 on volume of about 37,000 shares.

Meanwhile, telecom company AT&T Inc.’s 4.75% series C perpetual preferred stock opened with a modest rise.

The preferreds (NYSE: TPrC) were tacking on 2 cents to $22.85 with about 47,000 shares trading.

Qwest Corp.’s 6.5% notes due 2056 saw an improvement Thursday morning.

The notes (NYSE: CTBB) were pushing up 16 cents to $23.60 on volume of about 33,000 notes.

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