Preferreds flat in early trading, fall by day's end; JPMorgan, Fifth Third launch $1,000-pars

By Stephanie N. Rotondo

Phoenix, June 2 - The preferred stock market was easing into things Monday as the new week - and the new month - began.

The Wells Fargo Hybrid and Preferred Securities Index started off flat in early trading and then slipped as the day progressed, falling 6 basis points from Friday's levels by the time the session wrapped up.

However there was activity in the preferred primary.

JPMorgan Chase & Co. launched a $1,000-par offering of fixed-to-floating rate noncumulative preferreds that was expected to come at benchmark size - $2.5 billion - according to a market source, speaking after the close.

Price talk had tightened to 5%, he said, from 5.125% at mid-morning when the deal was the subject of market chatter but no details had been released.

Late in the session the trader saw the issue at 100.375 in the gray market.

JPMorgan Securities LLC is the sole bookrunner.

Fifth Third Bancorp launched an offering of $1,000-par series J fixed-to-floating rate noncumulative perpetual preferreds on Monday.

According to a trader, price talk on the new issue was around 5.125%. However, another market source said pricing had been revised to 4.9%, though the size was expected to stay the same at $300 million.

Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC are leading the deal.

A source said he expected both issues to price late Monday but details had not emerged as of 7 p.m. ET.

Oxford frees, Public Storage active

Among recent deals, Public Storage's $250 million of 6% series Z cumulative preferreds was among the day's most actively traded securities, according to a market source.

The source said about 652,000 shares were exchanged during the session. The preferreds ended down 3 cents at $24.92.

The deal priced Wednesday.

Oxford Lane Capital Corp.'s $28 million of 8.125% series 2024 term preferreds - a deal that priced Thursday - freed from the syndicate Monday morning, a trader reported.

He saw the issue trading around $24.85.

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