Tsakos prices upsized fixed-to-floating preferreds; Wells Fargo eyed on settlement news

By Stephanie N. Rotondo

Seattle, March 29 – The preferred stock market attempted to extend its Tuesday gains into the midweek session, according to index readings. However, like the broader markets, the preferred space ended lower than it started.

The Wells Fargo Hybrid and Preferred Securities index closed the day flat, though it was up 8 basis points at mid-morning. The U.S. iShares Preferred Stock ETF finished 8 bps better, after being up 18 bps earlier in the day.

The primary continued to sputter out deals, as Tsakos Energy Navigation Ltd. brought $100 million of 9.25% series E fixed-to-floating rate cumulative redeemable preferreds.

The deal came upsized from $50 million. Price talk was around 9.25%, according to a market source.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, UBS Securities LLC, Citigroup Global Markets Inc. and Stifel Nicolaus & Co. Inc. are running the books.

Dividends will be fixed until May 28, 2027, at which point the rate will begin floating at Libor plus 688.1 bps.

Meanwhile, Wells Fargo & Co.’s 5.5% series X class A noncumulative preferreds (NYSE: WFCPrX) managed to end slightly higher on the day, though the issue gyrated between red and green for most of the session.

The movement in the issue came as the San Francisco-based bank announced it had reached a $110 million settlement with customers that were impacted by a fake account scandal revealed in September.

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