Morning Commentary: OceanFirst sells preferreds; Ally Financial, New Residential lower

By James McCandless

San Antonio, May 4 – The preferred market started on a negative path on Monday with the Wells Fargo Hybrid & Preferred Securities Financial index down by 0.29%.

The primary market saw OceanFirst Financial Corp. price a $55 million offering of $25-par series A fixed-to-floating rate non-cumulative perpetual preferred stock with an initial dividend of 7%.

There is an $8.25 million greenshoe.

Piper Sandler & Co. and Raymond James & Associates, Inc. are the joint bookrunners.

The dividend is fixed until May 15, 2025, then converts to a rate of the three-month SOFR plus 684.5 basis points.

The preferreds are redeemable beginning May 15, 2025. Prior to that, the preferreds are redeemable within 90 days after a regulatory capital treatment event.

At the head of the early secondary market, Ally Financial, Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities were losing ground.

The preferreds (NYSE: ALLYPrA) were down 10 cents to $22.04 on volume of about 56,000 shares.

Elsewhere in the finance space, Wells Fargo & Co.’s 5.5% series X non-cumulative perpetual class A preferred stock was also under pressure.

The preferreds (NYSE: WFCPrX) were declining by 12 cents to $25.45 with about 28,000 shares trading.

Meanwhile, real estate investment trust New Residential Investment Corp.’s 6.375% series C fixed-to-floating rate cumulative redeemable preferreds were following the trend.

The preferreds (NYSE: NRZPrC) were diving 35 cents to $16.25 on volume of about 43,000 shares.

Telecom services provider AT&T Inc.’s 5% series A cumulative redeemable preferred stock and its 5.35% global notes due 2066 were both weakening.

The series A preferreds (NYSE: TPrA) were shedding 8 cents to $24.96 with about 38,000 shares trading.

The notes (NYSE: TBB) were dipping 2 cents to $25.88 with about 29,000 notes trading.

Real estate developer Brookfield Property Partners LP’s 6.375% series 2 class A cumulative redeemable perpetual preferred units trailed.

The preferreds (Nasdaq: BPYPO) were moving down 27 cents to $21.00 on volume of about 23,000 shares.

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