AIG sells $25-par preferreds; JPMorgan active, mixed; Digital Realty Trust improves

By James McCandless

San Antonio, March 7 – A new deal in the preferred market served as the backdrop for a declining secondary market.

American International Group, Inc. priced $500 million of $25-par series A non-cumulative perpetual preferred stock at par with a dividend of 5.85%.

In the secondary, JPMorgan Chase & Co.’s 5.75% series DD and 6% series EE non-cumulative preferreds closed mixed.

Elsewhere in finance, U.S. Bancorp’s series B floating-rate non-cumulative perpetual preferred stock ended slightly worse off.

Meanwhile, real estate investment trust Digital Realty Trust, Inc.’s recent 5.85% series K cumulative redeemable preferreds improved.

And sector peer AGNC Investment Corp.’s 6.875% series D fixed-to-floating rate cumulative redeemable preferred stock took the negative path.

Public Storage’s recent 5.6% series H cumulative preferreds ended better.

AIG prices

American International Group priced $500 million of $25-par series A non-cumulative perpetual preferred stock (Baa3/BBB-/BBB-) at par with a dividend of 5.85%.

There is no greenshoe.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC are the bookrunners.

J.P. Morgan Securities LLC and RBC Capital Markets, LLC are the lead managers.

The preferreds are redeemable on or after March 15, 2024 at par. Prior to that, they are redeemable within 90 days after a ratings agency event or a regulatory capital event.

JPMorgan mixed

Leading trading in the secondary, JPMorgan’s 5.75% series DD and 6% series EE non-cumulative preferreds closed mixed after Thursday trading.

The series DD preferreds (NYSE: JPMPrD) were up 2 cents to close at $25.87 on volume of about 938,000 shares.

On Wednesday, the preferreds rose 5 cents.

The series EE preferreds (NYSE: JPMPrC) closed down 5 cents to close at $26.32 on volume of about 577,000 shares.

On Wednesday, the preferreds picked up 2 cents.

Elsewhere in the finance space, U.S. Bancorp’s series B floating-rate non-cumulative perpetual preferred stock was slightly lower by the close.

The preferreds (NYSE: USBPrH) declined by 2 cents to close at $19.23 with about 777,000 shares trading.

Digital Realty rises

Meanwhile, real estate investment trust Digital Realty’s recent 5.85% series K cumulative redeemable preferreds were seen improving.

The preferreds, trading under the temporary symbol “DLRPO,” added 4 cents to close at $24.97 on volume of about 632,000 shares.

Sector peer AGNC’s 6.875% series D fixed-to-floating rate cumulative redeemable preferred stock took the opposite path.

The preferreds (Nasdaq: AGNCM) were down 2 cents to close at $24.80 with about 327,000 shares trading.

Public Storage, another REIT, saw its recent 5.6% series H cumulative preferreds end on a better note.

The preferreds, trading under the temporary symbol “PSALL,” rose 2 cents to close at $25.06 on volume of about 263,000 shares.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down by 0.34% by the Thursday close, almost doubling a 0.18% drop from early trading.

The iShares US Preferred Stock ETF was down 15 cents to $36.25.

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