Morning Commentary: Athene, First Internet to tap $25-par market; SoCal Edison improves

By James McCandless

San Antonio, June 5 – As the preferred primary market came to life, the secondary started the day higher.

The Wells Fargo Hybrid & Preferred Securities Financial index was up by 0.03%.

On Wednesday morning, Athene Holding Ltd. announced plans to price a $200 million offering of $25-par series A fixed-to-floating rate perpetual non-cumulative preference shares with an initial dividend in the 6.5% area.

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

The preferreds are redeemable on or after June 30, 2029. Prior to that, they are redeemable after 30 days and no more than 60 days after a capital disqualification event.

The dividend is fixed until June 30, 2029, then converts to a floating rate of Libor plus a spread.

Also, First Internet Bancorp said it plans to sell $30 million of fixed-to-floating rate subordinated notes due 2029 with an initial coupon in the 6.125% area.

Keefe, Bruyette & Woods, Inc. is the bookrunner.

Co-managers are Janney Montgomery Scott LLC, BB&T Capital Markets, Boenning & Scattergood, Inc. and William Blair & Co., LLC.

The notes are redeemable after five years. Prior to that, they are redeemable after a regulatory capital treatment event.

The coupon is fixed for five years, then converts to a floating rate of Libor plus a spread.

Meanwhile, in the secondary market, Southern California Edison, a subsidiary of Edison International, saw its 5.75% cumulative fixed-to-floating rate trust preference securities improve slightly as the session began.

The preferreds (NYSE: SCEPrH) were up 2 cents to $24.10 on volume of about 120,000 shares.

Elsewhere, in the finance space, Deutsche Bank Contingent Capital Trust V’s 8.05% trust preferred securities and its Deutsche Bank Contingent Capital Trust II’s 6.55% trust preferred securities were both moving upware.

The 8.05% preferreds (NYSE: DKT) rose 1 cent to $25.35 with about 65,000 shares trading.

The 6.55% preferreds (NYSE: DXB) added 12 cents to $24.46 with about 55,000 shares trading.

Sector peer Regions Financial Corp.’s 5.7% series C fixed-to-floating rate non-cumulative perpetual preferreds also started positive.

The preferreds (NYSE: RFPrC) improved by 5 cents to $25.53 on volume of about 32,000 shares.

Real estate investment trust AGNC Investment Corp.’s 6.875% series D fixed-to-floating rate cumulative redeemable preferred stock was under water Wednesday morning.

The preferreds (Nasdaq: AGNCM) were down 11 cents to $25.15 with about 60,000 shares trading.

Insurance name Maiden Holdings, Ltd.’s 7.75% notes due 2043 were also going against the early trend.

The notes (NYSE: MHNC) were dropped 12 cents to $19.23 on volume of about 50,000 notes.

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