Morning Commentary: American Finance, Capital One offer preferreds; Bank of America up

By James McCandless

San Antonio, Sept. 4 – The preferred secondary started off gaining modestly with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.09%.

In primary activity, American Finance Trust, Inc. said it plans to offer more of its $25-par 7.5% series A cumulative redeemable perpetual preferred stock.

There are 2,075,686 shares outstanding.

BMO Capital Markets Corp. and B. Riley FBR, Inc. are the joint bookrunners.

The preferreds are redeemable on or after March 26, 2024 at par. Prior to that, they are redeemable within 90 days after a delisting event or within 120 days after a change of control at par.

On Wednesday morning, the preferreds (Nasdaq: AFINP) were down 65 cents to $25.30 on volume of about 118,000 shares.

Also, Capital One Financial Corp. said it plans to price $25-par series I fixed-rate non-cumulative perpetual preferred stock with a dividend in the 5.25% area.

BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners.

The preferreds are redeemable on or after Dec. 1, 2024 at par. Prior to that, they are redeemable within 90 days after a regulatory capital treatment event.

Leading secondary activity, Bank of America Corp.’s 6% series GG non-cumulative preferred stock was positive at the start.

The preferreds (NYSE: BACPrB) were up 2 cents to $26.91 with about 211,000 shares trading.

Sector peer Wells Fargo & Co.’s 5.5% series X non-cumulative perpetual class A preferreds were improving as the session started.

The preferreds (NYSE: WFCPrX) were up 8 cents to $25.78 on volume of about 108,000 shares.

Elsewhere, insurance provider Allstate Corp.’s 5.1% series H fixed-rate non-cumulative perpetual preferred stock was also rising.

The preferreds (NYSE: ALLPrH) were adding 5 cents to $26.25 with about 108,000 shares trading.

Real estate investment trust New Residential Investment Corp.’s 7.125% series B fixed-to-floating rate cumulative redeemable preferreds were under water, going against the trend.

The preferreds (NYSE: NRZPrB) were down 3 cents to $25.09 on volume of about 92,000 shares.

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