Morning Commentary: First Republic prices; AXA gains; Ready Capital under pressure

By James McCandless

San Antonio, Nov. 26 – The preferred space opened Tuesday with a small gain as the Wells Fargo Hybrid & Preferred Securities Financial index started up by 0.04%.

In primary activity, First Republic Bank priced $350 million of $25-par 4.7% series J non-cumulative perpetual preferred stock at par late Monday.

There is a $50 million greenshoe.

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

As the market opened for Tuesday trading, the preferreds, trading under the temporary symbol “FRCJL,” were spotted under par at $24.85 on volume of about 468,000 shares.

Also, Fortress Biotech, Inc. provided more details on its $5.25 million add-on to its 9.375% series A perpetual preferred stock, which priced at $20.00 a share.

The preferreds have a $25.00 liquidation preference.

Benchmark Co. and ThinkEquity are the bookrunners.

The securities are redeemable on or after Dec. 15, 2022 at par plus accrued dividends. Prior to that, the preferreds are redeemable within 120 days after a change of control.

Fortress Biotech originally issued the preferreds in a $25 million offering at par on Nov. 14, 2017 and registered to sell up to $26 million more of the shares on April 5, 2018 at the same terms.

The secondary market saw AXA Equitable Holdings, Inc.’s recent 5.25% series A fixed-rate non-cumulative perpetual preferred stock kick off with a positive spin.

The preferreds, trading under the temporary symbol “AXQEL,” were adding 2 cents to $24.87 with about 192,000 shares trading.

Elsewhere in the finance space, Synchrony Financial’s 5.625% series A non-cumulative perpetual preferreds were also gaining ground.

The preferreds (NYSE: SYFPrA) were improving by 4 cents to $25.48 on volume of about 92,000 shares.

Elsewhere, real estate finance name Ready Capital Corp.’s 6.2% senior notes due 2026 were under pressure early.

The notes (NYSE: RCB) were off by 1 cent to $25.25 with about 132,000 shares trading.

On Monday, the company priced an additional $45 million of the notes.

Middle market investor Compass Diversified Holdings LLC’s 7.875% series C cumulative preferred shares were on the rise.

The preferreds (NYSE: CODIPrC) were rising 6 cents to $24.95 on volume of about 86,000 shares.

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