Bank of America taps $25-par market; Energy Transfer preferreds gain; JPMorgan weaker

By James McCandless

San Antonio, June 20 – The preferred market sustained its positive trend on Thursday that began earlier in the week.

In primary activity, Bank of America Corp. priced a $1,325,000,000 offering of $25-par series KK non-cumulative preferred stock with a dividend of 5.375%.

Cadence Bancorp. sold $85 million of 10-year fixed-to-floating rate subordinated notes on Thursday at par to yield 4.75%.

Leading the secondary, Energy Transfer Operating, LP’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units were gaining.

Meanwhile, in finance, JPMorgan Chase & Co.’s 6% series EE non-cumulative preferreds saw a weaker day.

Sector peer Citigroup, Inc.’s 6.875% series K fixed-to-floating-rate non-cumulative preferred stock also declined.

Utilities name Southern California Edison, a subsidiary of Edison International, saw its 5% trust preference securities close better.

In shipping, Triton International Ltd.’s new 8% series B cumulative redeemable perpetual preference shares improved.

Bank of America prices

In primary activity, Bank of America priced a $1,325,000,000 offering of $25-par series KK non-cumulative preferred stock with a dividend of 5.375%.

There is a $198.75 million greenshoe.

The deal, announced on Tuesday, came in below talk for a dividend of 5.5%.

BofA Securities, Inc. is the bookrunner.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC, Wells Fargo Securities, LLC and RBC Capital Markets, LLC are also underwriters.

The preferred are redeemable on or after June 25, 2024 at par. Prior to that, they are redeemable within 90 days after a capital treatment event.

Cadence’s deal

Cadence sold $85 million of 10-year fixed-to-floating rate subordinated notes on Thursday at par to yield 4.75%.

The notes will reset June 30, 2024 to a floating-rate of Libor plus 303 basis points.

Sandler O’Neill + Partners, LP and U.S. Bancorp Investments Inc. were the bookrunners.

Energy Transfer gains

Leading the secondary space, Energy Transfer’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferreds were seen gaining.

The preferreds (NYSE: ETPPrE) were up 11 cents to close at $25.01 on volume of about 740,000 shares.

JPMorgan weaker

Meanwhile, in the finance space, JPMorgan’s 6% series EE non-cumulative preferreds ended the session weaker.

The preferreds (NYSE: JPMPrC) shaved off 7 cents to close at $27.07 with about 268,000 shares trading.

On Wednesday, the preferreds improved by 7 cents.

Sector peer Citigroup’s 6.875% series K fixed-to-floating rate non-cumulative preferred stock was also in decline.

The preferreds (NYSE: CPrK) dipped 15 cents to close at $27.78 on volume of about 220,000 shares.

SoCal Edison better

Elsewhere, utilities name Southern California Edison’s 5% trust preference securities closed the day better.

The preferreds (NYSE: SCEPrL) picked up 9 cents to close at $21.06 with about 254,000 shares trading.

On Wednesday, the preferreds added 7 cents.

Triton improves

In shipping, Triton’s new 8% series B cumulative redeemable perpetual preference shares saw an improvement.

The preferreds, trading under the temporary symbol “TTONF,” tacked on 9 cents to close at $25.25 on volume of about 220,000 shares.

On Wednesday, the preferreds jumped up 26 cents.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.06% by the close, narrowing a 0.26% rise from early Thursday trading.

The iShares US Preferred Stock ETF was up 6 cents to $37.09.

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