Morning Commentary: Medalist prices; Dynex Capital on tap; AT&T preferreds top par

By James McCandless

San Antonio, Feb. 13 – Thursday in the preferred market saw a positive start with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.08%.

In early primary activity, Medalist Diversified REIT, Inc. priced a $5 million offering of $25-par series A cumulative redeemable preferred stock with a dividend of 8% at par on Thursday.

There is a $750,000 greenshoe.

The deal, announced on Feb. 3, was downsized from an initial $20 million.

Aegis Capital Corp. is the bookrunner.

The preferreds are redeemable on or after Feb. 19, 2022 at par. There is a mandatory redemption on Feb. 19, 2025.

Also, Dynex Capital, Inc. announced plans to price an offering of $25-par series C fixed-to-floating rate cumulative redeemable preferred stock at par.

J.P. Morgan Securities LLC, RBC Capital Markets LLC and Keefe, Bruyette & Woods, Inc. are the joint bookrunners.

The dividend is fixed until April 15, 2025, then converts to a floating rate of Libor plus a spread.

The preferreds are redeemable on or after April 15, 2025. Prior to that, the preferreds are redeemable within 120 days after a change of control at par.

Leading the morning’s secondary trading, telecom name AT&T, Inc.’s new $1.75 billion 4.75% series C perpetual preferred stock was trading above par on its first day.

The preferreds, trading under the temporary symbol “ATTXL,” were seen at $25.06 on volume of about 8.1 million shares.

The company’s established 5% series A cumulative perpetual preferred stock opened with a small gain.

The preferreds (NYSE: TPrA) were adding 1 cent to $25.98 on volume of about 571,000 shares.

Meanwhile, real estate investment trust AGNC Investment Corp.’s 6.125% series F fixed-to-floating rate cumulative redeemable preferred stock also opened on a positive trend.

The preferreds (Nasdaq: AGNCP) were improving by 6 cents to $24.95 with about 354,000 shares trading.

Elsewhere, in the finance space, Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferred stock was trailing.

The preferreds (NYSE: WFCPrZ) were off 2 cents to $25.45 on volume of about 77,000 shares.

Sector peer Ally Financial, Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities followed the market upward.

The preferreds (NYSE: ALLYPrA) were gaining 7 cents to $26.30 with about 68,000 shares trading.

Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferreds were relatively active but unchanged so far.

The preferreds (NYSE: COFPrJ) were level at $24.95 on volume of about 66,000 shares.

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