JPMorgan, Wells Fargo kick off bank earnings; JPMorgan sells $2 billion; Colony set to list

By Stephanie N. Rotondo

Phoenix, April 14 – The preferred stock market was firm as investors reacted to the kick-off to bank earnings season.

The Wells Fargo Hybrid and Preferred Securities index closed 6 basis points better.

JPMorgan Chase & Co. and Wells Fargo & Co. released their latest quarterly results ahead of the market’s open. For JPMorgan, the results showed improved year-over-year profit that even beat expectations.

Wells Fargo, however, reported a surprising decline in profit.

Still, both banks’ preferreds were trending higher.

For its part, JPMorgan sold $2 billion of 5.3% $1,000-par series Z fixed-to-floating rate preferred stock.

Initial price talk was 5.5%.

“5.5% on a $1,000-par – that’s cheap money,” a trader said. If that deal does well, Wells Fargo – still considered to be a stronger bank than JPMorgan – could come with a deal below that level, the trader speculated.

Away from banks and earnings, Teekay Offshore Partners LP’s new $125 million issue of 8.5% series B cumulative redeemable preferred units were quoted at $24.65 bid, $24.70 offered.

The deal priced Monday, coming upsized from $75 million and at the tight end of talk.

Elsewhere in the recently priced space, Colony Capital Inc.’s 7.125% series C cumulative redeemable preferreds are slated to list on the New York Stock Exchange on Wednesday.

The $250 million deal priced April 8. On Monday, the company said its greenshoe had been fully exercised, lifting issuance to $287.5 million.

The preferreds will be listed under the symbol “CLNYPC.”

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