Morning Commentary: NatWest sells notes; Qurate preferreds on deck; AT&T active, flat

By James McCandless

San Antonio, Aug. 26 – Opening the middle of the week, top traders in the preferred market trended higher as the Wells Fargo Hybrid & Preferred Securities Financial index began up by 0.09%.

In primary activity, NatWest Group plc priced an $850 million offering of $1,000-par fixed-to-fixed reset rate subordinated tier 2 notes due Nov. 28, 2035 with an initial coupon of 3.032% at par.

The coupon is fixed until Nov. 28, 2030, when it resets to a fixed rate equal to Treasuries plus 235 basis points, which came in under talk of Treasuries plus 260 bps.

The notes are redeemable on or after Aug. 28, 2030 at par. Prior to that, the notes are redeemable after a capital disqualification event or a tax event at par.

Also, Qurate Retail, Inc. plans to price an offering of series A cumulative redeemable preferred stock with a dividend of 8%.

The preferreds are a part of a special dividend in which each outstanding share of common stock is entitled to a special cash dividend in the amount of $1.50 per common share and 0.03 of a share of the new preferred stock.

The preferreds are subject to mandatory redemption on March 15, 2031.

Leading the secondary market charge, telecom services provider AT&T, Inc.’s 4.75% series C perpetual preferred stock was active but unchanged so far.

The preferreds (NYSE: TPrC) were holding level at $25.50 on volume of about 99,000 shares.

Meanwhile, in the finance space, Truist Financial Corp.’s 4.75% series R non-cumulative perpetual preferred stock was tracking upward.

The preferreds (NYSE: TFCPrR) were gaining 11 cents to $26.40 with about 95,000 shares trading.

Sector peer Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities were under pressure.

The preferreds (NYSE: ALLYPrA) were shaving off 8 cents to $24.67 on volume of about 75,000 shares.

Elsewhere, rural lender Federal Agricultural Mortgage Corp.’s 5.25% series F non-cumulative perpetual preferreds were seeing positive results as the day kicked off.

The preferreds (NYSE: AGMPrF) were picking up 17 cents to $26.10 with about 67,000 shares trading.

Pennsylvania Real Estate Investment Trust’s 7.2% series C cumulative redeemable perpetual preferred shares were on the decline.

The preferreds (NYSE: PEIPrC) were off 12 cents to $5.61 on volume of about 66,000 shares.

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