Allstate preferreds improve; Ally Financial loses; Public Storage below par

By James McCandless

San Antonio, Nov. 6 – The preferred market was under pressure for most of Wednesday with pockets of positivity.

The primary market was active with Synchrony Financial pricing a $750 million offering of $25-par series A non-cumulative perpetual preferred stock at par with a dividend of 5.625%.

Secondary trading was marked by an improvement for Allstate Corp.’s new 4.75% series I fixed-rate non-cumulative perpetual preferred stock.

Meanwhile, in finance, Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities were seen losing.

Sector peer Synovus Financial Corp.’s 5.875% series E fixed-rate reset non-cumulative perpetual preferreds were also under water.

REIT Public Storage’s new $225 million 4.7% series J cumulative preferred shares finished its first trading day under par.

Elsewhere, asset manager Northern Trust Corp.’s recent 4.7% series E non-cumulative perpetual preferred stock gained.

Synchrony’s deal

The primary market rolled on with Synchrony pricing a $750 million offering of $25-par series A non-cumulative perpetual preferred stock (BB-/B) at par with a dividend of 5.625%.

There is no greenshoe.

The deal, announced Wednesday morning, was upsized from an initial $250 million and came in under talk of a dividend of 5.75%.

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

The preferreds are redeemable on or after Nov. 15, 2024 at par. Prior to that, the preferreds are redeemable within 90 days after a regulatory capital treatment event at par.

Allstate improves

Secondary trading saw a marked improvement for insurance provider Allstate’s new 4.75% series I fixed-rate non-cumulative perpetual preferred stock.

The preferreds, trading under the temporary symbol “ASTLZ,” were up 1 cent to close at $24.90 on volume of about 1.1 million shares.

On Tuesday, the preferreds closed under par.

Ally Financial loses

Meanwhile, in the finance space, Ally Financial’s 8.125% series 2 fixed-to-floating rate trust preferred securities were seen losing by the end of the day.

The preferreds (NYSE: ALLYPrA) declined by 9 cents to close at $26.34 with about 637,000 shares trading.

Sector peer Synovus Financial’s 5.875% series E fixed-rate reset non-cumulative perpetual preferreds were also under water.

The preferreds (NYSE: SNVPrE) shaved off 14 cents to close at $26.12 on volume of about 528,000 shares.

Public Storage under par

Real estate investment trust Public Storage’s new $225 million 4.7% series J cumulative preferred shares finished its first trading day under par.

The preferreds, trading under the temporary symbol “PBLSZ,” finished below par at $24.96 with about 571,000 shares trading.

Northern Trust up

Elsewhere, asset manager Northern Trust’s recent 4.7% series E non-cumulative perpetual preferred stock gained as the session concluded.

The preferreds, trading under the temporary symbol “NTREL,” picked up 3 cents to close at $25.23 on volume of about 507,000 shares.

On Tuesday, the preferreds gained 3 cents.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index closed down by 0.14%, extending the 0.02% loss from early Wednesday trading.

The iShares US Preferred Stock ETF was up 6 cents to $37.31.

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