Morning Commentary: M&T sells preferreds; Energy Transfer better; Deutsche Bank rises

By James McCandless

San Antonio, July 24 – The preferred space started Wednesday on a positive path with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.14%.

In the primary space, M&T Bank Corp. priced a $400 million offering of $1,000-par series G fixed-rate reset non-cumulative preferred stock at par with an initial dividend of 5%.

There is no greenshoe.

The deal, announced on Tuesday, matched the initial $400 million offering size and came in above talk for a dividend in the 4% area.

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC are the joint bookrunners.

The preferreds are redeemable on any dividend payment date on Aug. 1, 2024. Prior to that, they are redeemable within 90 days after a regulatory capital treatment event.

Separately, JPMorgan Chase & Co. said it plans to sell series FF fixed-to-floating rate non-cumulative preferred stock. The notes will have an initial fixed-rate dividend and then will convert to a floating rate expected to be a spread over SOFR.

J.P. Morgan Securities LLC is the bookrunner.

In the secondary, Energy Transfer Operating, LP’s 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units were leading the market upward.

The preferreds (NYSE: ETPPrE) were up 5 cents to $25.23 on volume of about 78,000 shares.

Meanwhile, in finance, Deutsche Bank Contingent Capital Trust V’s 8.05% trust preferred securities and Deutsche Bank Contingent Capital Trust II’s 6.55% trust preferred securities were both gaining.

The 8.05% preferreds (NYSE: DKT) were higher by 14 cents to $25.22 with about 51,000 shares trading.

The 6.55% preferreds (NYSE: DXB) were up 13 cents to $24.36 with about 27,000 shares trading.

The company reported a loss of $3.5 billion in the previous quarter on Wednesday.

Sector peer JPMorgan Chase’s 6% series EE and 5.75% series DD non-cumulative preferreds were following the positive trend.

The series EE preferreds (NYSE: JPMPrC) were picking up 4 cents to $27.51 on volume of about 30,000 shares.

The series DD preferreds (NYSE: JPMPrD) were adding 5 cents to $27.41 on volume of about 28,000 shares.

Elsewhere, in the telecom space, AT&T, Inc.’s 5.35% global notes due 2066 were improving slightly.

The notes (NYSE: TBB) were gaining 2 cents to $26.47 with about 42,000 notes trading.

On Wednesday, the company reported earnings of 89 cents per share, falling in line with analyst expectations.

Utilities name Duke Energy Corp.’s 5.75% series A cumulative redeemable perpetual preferred stock followed the market.

The preferreds (NYSE: DUKPrA) were up 7 cents to $27.06 on volume of about 40,000 shares.

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