Morning Commentary: Fortress Biotech prices; AT&T in pipeline; New Residential under par

By James McCandless

San Antonio, Feb. 12 – The preferred space opened Wednesday virtually flat as the Wells Fargo Hybrid & Preferred Securities Financial index began up by 0.01% while volume leaders skewed downward.

The primary market saw Fortress Biotech, Inc. price $12.5 million more of its 9.375% series A cumulative redeemable perpetual preferred stock at $20.00 per share.

There is a $1,875,000 greenshoe.

The preferreds have a $25.00 liquidation preference.

Benchmark Co., LLC and ThinkEquity are the joint bookrunners.

The preferreds are redeemable on or after Dec. 15, 2022 at par. Prior to that, the preferreds are redeemable within 120 days after a change of control at par.

The preferreds (Nasdaq: FBIOP) were dropping 98 cents to $20.23 on volume of about 193,000 shares.

Meanwhile, AT&T, Inc. announced that it plans to price an offering of $25-par series C perpetual preferred stock.

BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The preferreds are redeemable after five years. Prior to that, the preferreds are redeemable 90 days after a ratings event at $25.50.

Secondary trading started with real estate investment trust New Residential Investment Corp.’s new $350 million 6.375% series C fixed-to-floating rate cumulative redeemable preferred stock moving under par on its first day.

The preferreds, trading under the temporary symbol “NRESP,” were seen at $24.83 with about 2 million shares trading.

Sector peer AGNC Investment Corp.’s 6.125% series F fixed-to-floating rate cumulative redeemable preferred stock were losing ground as the day kicked off.

The preferreds (Nasdaq: AGNCP) declined by 7 cents to $24.88 on volume of about 179,000 shares.

UMH Properties, Inc.’s 6.375% series D cumulative redeemable preferred stock started on the negative side.

The preferreds (NYSE: UMHPrD) were shaving off 1 cent to $25.05 with about 133,000 shares trading.

In the finance space, Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferreds were also under water.

The preferreds (NYSE: COFPrJ) were losing 3 cents to $24.97 on volume of about 159,000 shares.

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