CoBank prices; JPMorgan, First Republic eye noncumulative deals; banks busy amid earnings

By Stephanie N. Rotondo

Phoenix, April 16 - New preferred stock issues were churning out Tuesday, but a trader said investors were sitting on the sidelines for the most part.

There were "not many markets" for CoBank ACB's new $200 million issue of 6.125% $100-par series G noncumulative perpetual preferreds, a deal that came late Monday. The trader said he was seeing par bids, but no offers for the paper.

As for Tuesday business, JPMorgan Chase & Co. announced a sale of $1,000-par series Q fixed-to-floating rate noncumulative perpetual preferreds.

"It's been quiet in that one too," the trader said.

At the close, but ahead of pricing, a market source said he was seeing the paper trade at par ¾ in the gray market. He noted that he had heard $1.5 billion preferreds were being sold at par to yield 5.15%.

Pricing details were not available as of 7 p.m. ET.

And, First Republic Bank said it was selling at least $150 million of $25-par series D noncumulative perpetual preferreds. Price talk was around 5.625%.

After the close, the issue priced at 5.5%, with $175 million of the preferreds being sold.

As soon as that deal was announced, a trader said he saw less 40 cent and less 35 cent bids for the paper, though he noted that activity was thin. He opined that the bookrunners were "gauging demand" before really putting it out there.

At midday, the most recent market for the preferreds was $24.87 bid, $24.94 offered in the gray. "So it's holding up well," he said.

At the close, a market source pegged the new issue at $24.85 in the gray.

Banks busy, stronger

In the secondary, Citigroup Inc., JPMorgan and Wells Fargo & Co. were dominating trading following recent earnings releases.

Citi's 5.8% series C noncumulative preferreds (NYSE: CPC) were seen up 2 cents at $25.27, while Wells Fargo's 5.25% series P noncumulative perpetual preferreds (NYSE: WFCPP) were technically up 17 cents at the close at $25.41.

However, a market source noted that the paper was up 6 cents in the final few minutes of trading, leading him to believe that the price was not entirely accurate. Instead, he said, "I would say they are up 11 cents at $25.35."

In JPMorgan issues, the 5.5% series O noncumulative preferreds (NYSE: JPMPD) were flat at $25.60 and the 5.45% series P noncumulative preferreds (NYSE: JPMPA) were up 4 cents at $25.33.

On Monday, Citi reported its quarterly results. For the first quarter, Citigroup reported a profit of $3.8 billion, or $1.23 per share, a 30% increase year over year. Revenues were $20.17 billion.

Analysts had been expecting $1.18 per share on revenues of $20.17 billion.

On Friday, JPMorgan posted earnings of $6.5 billion, a 33% surge from the year before. While earnings beat estimates, revenues did not.

As for Wells Fargo, it reported a 22% increase in earnings at $5.2 billion.

Both JPMorgan and Wells Fargo said that revenues were stagnating due mostly to a decline in loans. For its part, Citigroup said its revenue growth was not strong, though its total loans increased.

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