Morning Commentary: Annaly, Sachem price; Citigroup preferreds down; Legg Mason lower

By James McCandless

San Antonio, June 21 – The preferred market opened Friday mixed, with top traders declining even as the Wells Fargo Hybrid & Preferred Securities Financial index started up by 0.11%.

The primary space saw Annaly Capital Management, Inc. price a $400 million offering of $25-par series I fixed-to-floating rate cumulative redeemable perpetual preferred stock at par with an initial dividend of 6.75%.

There is a $60 million greenshoe.

The deal was announced on Thursday.

The preferreds are redeemable on or after June 30, 2024 at par. Prior to that, they are redeemable within 120 days after a change-of-control event.

On Friday morning, the preferreds, trading under the temporary symbol “ACAXP,” were trading below par at $24.76 on volume of about 3.5 million shares.

Sachem Capital Corp. sold a downsized $23 million of notes due June 30, 2024 with a coupon of 7.125%.

There is a $3.45 million greenshoe.

The deal, announced on Thursday, was downsized from an initial $25 million and came in at the high end of talk for a coupon of 7% to 7.125%.

Ladenburg Thalmann & Co. Inc. and Janney Montgomery Scott LLC are the joint bookrunners.

The $25-par notes are redeemable on or after June 30, 2021 at par.

Meanwhile, in the secondary, Citigroup Capital XIII’s 7.875% fixed-to-floating rate trust preferred securities were lower.

The preferreds (NYSE: CPrN) were down 21 cents to $27.53 with about 88,000 shares trading.

Elsewhere in the finance space, Deutsche Bank Contingent Capital Trust V’s 8.05% trust preferred securities were also declining.

The preferreds (NYSE: DKT) were lower by 2 cents to $25.91 on volume of about 22,000 shares.

Asset manager Legg Mason, Inc.’s 5.45% junior subordinated notes due 2056 followed the negative trend.

The notes (NYSE: LMHB) were off 3 cents to $24.71 with about 31,000 notes trading.

In telecom, AT&T, Inc.’s 5.35% global notes due 2066 began the day trailing.

The notes (NYSE: TBB) were off by 2 cents to $25.93 on volume of about 26,000 notes.

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