Sotherly Hotels taps preferred market; Duke Energy improves; JPMorgan, KeyCorp decline

By James McCandless

San Antonio, April 11 – Rumblings in the preferred primary market served as the backdrop for a mixed performance in the secondary space.

Sotherly Hotels Inc. priced a $27 million offering of $25-par series D cumulative redeemable perpetual preferred stock at par with a dividend of 8.25%.

In the secondary, Duke Energy Corp.’s 5.75% series A cumulative redeemable perpetual preferred stock saw a positive swing.

Elsewhere, JPMorgan Chase & Co.’s 6% series EE non-cumulative preferreds were pushed lower.

Sector peer KeyCorp’s 5.65% series F fixed-rate perpetual non-cumulative preferred stock was also down.

U.S. Bancorp’s series B non-cumulative perpetual preferreds followed the trend, edging lower.

Meanwhile, in insurance, Brighthouse Financial, Inc.’s 6.6% series A non-cumulative perpetual preferreds trailed.

Sotherly prices

Sotherly Hotels priced a $27 million offering of $25-par series D cumulative redeemable perpetual preferred stock at par with a dividend of 8.25%.

There is a $4.05 million greenshoe.

The deal, announced on Monday, matched the initial $27 million offering amount and came in at the low end of talk for a dividend of 8.25% to 8.5%.

Sandler O’Neill & Partners, LP is the lead bookrunner, and Janney Montgomery Scott LLC is a passive bookrunner.

The preferreds are redeemable on or after April 18, 2024 at par. Prior to that, they are redeemable within 120 days after a change-of-control event.

Duke Energy gains

Meanwhile, leading secondary trading volume for the fourth consecutive day, Duke Energy’s 5.75% series A cumulative redeemable perpetual preferred stock ended slightly positive.

The preferreds (NYSE: DUKPrA) were up 2 cents to close at $25.73 on volume of about 410,000 shares.

On Wednesday, the preferreds picked up 6 cents.

JPMorgan down

Elsewhere, in the finance space, JPMorgan’s 6% series EE non-cumulative preferreds were pushed lower by the end of the session.

The preferreds (NYSE: JPMPrC) lost 4 cents to close at $26.50 with about 321,000 shares trading.

On Wednesday, the preferreds declined by 6 cents.

Sector peer KeyCorp’s 5.65% series F fixed-rate perpetual non-cumulative preferred stock also finished negative.

The preferreds (NYSE: KEYPrJ) fell 10 cents to close at $25.08 on volume of about 148,000 shares.

U.S. Bancorp’s series B non-cumulative perpetual preferreds followed the negative trend exhibited by top traders.

The preferreds (NYSE: USBPrH) dropped 2 cents to close at $19.13 with about 112,000 shares trading.

Brighthouse trails

Insurance provider Brighthouse’s 6.6% series A non-cumulative perpetual preferreds were also spotted trailing on Thursday.

The preferreds (Nasdaq: BHFAP) shaved off 9 cents to close at $25.90 on volume of about 214,000 shares.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index closed up by 0.04%, doubling the slight 0.02% gain from early Thursday trading.

The iShares US Preferred Stock ETF was up 3 cents to $36.68.

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