Capital One prices, leads secondary; Independent Bank sells $1,000-pars; DCP Midstream drops

By James McCandless

San Antonio, Sept. 10 – The preferred market skewed toward positivity entering the second half of the week.

Coming down the primary pipeline, Capital One Financial Corp. priced a $125 million offering of $25-par series K fixed-rate non-cumulative perpetual preferred stock with a dividend of 4.625%.

Also, Independent Bank Group, Inc. sold a $130 million offering of $1,000-par 10-year fixed-to-floating rate subordinated notes with an initial coupon of 4% at par.

First Republic Bank priced a $500 million offering of $25-par series K non-cumulative perpetual preferred stock with a dividend of 4.125% on Wednesday.

Meanwhile, Capital One’s established 5% series I and 4.8% series J fixed-rate non-cumulative perpetual preferred stocks both received boosts.

Also in the finance space, Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferreds rose.

Sector peer Synchrony Financial’s 5.625% series A non-cumulative perpetual preferred stock was under pressure.

In oil and gas, DCP Midstream, LP’s 7.875% series B fixed-to-floating rate cumulative redeemable perpetual preferred units dropped.

Elsewhere, rural lender Federal Agricultural Mortgage Corp.’s 5.25% series F non-cumulative preferred stock moved to better levels.

Capital One prices

Coming down the Thursday primary pipeline, Capital One priced a $125 million offering of $25-par series K fixed-rate non-cumulative perpetual preferred stock (Baa3/BB/BB+) with a dividend of 4.625%.

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

The preferreds are redeemable on or after Dec. 1, 2025 at par. Prior to that, the preferreds are redeemable within 90 days after a regulatory capital treatment event.

Independent Bank’s deal

Also, Independent Bank sold a $130 million offering of $1,000-par 10-year fixed-to-floating rate subordinated notes (Kroll: BBB) with an initial coupon of 4% at par.

Keefe, Bruyette & Woods, Inc. and Piper Sandler & Co. are the bookrunners.

The coupon is fixed until Sept. 15, 2025, then converts to a floating rate of the three-month SOFR plus 388.5 basis points.

The notes are redeemable on or after Sept. 15, 2025 at par. Prior to that, the notes are redeemable after a tax event, tier 2 capital event, or if the company is required to register as an investment company at par.

First Republic prices

First Republic priced a $500 million offering of $25-par series K non-cumulative perpetual preferred stock with a dividend of 4.125% on Wednesday.

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

Finance names up

Meanwhile, leading the secondary space, Capital One’s established 5% series I and 4.8% series J fixed-rate non-cumulative perpetual preferred stocks both received boosts by the end of the day.

The series I preferreds (NYSE: COFPrI) were up 17 cents to close at $25.20 on volume of about 557,000 shares.

The series J preferreds (NYSE: COFPrJ) jumped up 43 cents to close at $24.53 on volume of about 478,000 shares.

Also in the finance space, Wells Fargo’s 4.75% series Z non-cumulative perpetual class A preferreds were on the rise.

The preferreds (NYSE: WFCPrZ) gained 14 cents to close at $24.92 with about 257,000 shares trading.

Sector peer Synchrony’s 5.625% series A non-cumulative perpetual preferred stock was under pressure, going against the trend.

The preferreds (NYSE: SYFPrA) were trailing by 5 cents to close at $24.17 on volume of about 237,000 shares.

DCP drops

In oil and gas, DCP Midstream’s 7.875% series B fixed-to-floating rate cumulative redeemable perpetual preferred units ended the afternoon on a drop.

The preferreds (NYSE: DCPPrB) dived 57 cents to close at $16.38 with about 271,000 shares trading.

Farmer Mac better

Elsewhere, rural lender Farmer Mac’s 5.25% series F non-cumulative preferred stock moved to better levels.

The preferreds (NYSE: AGMPrF) rose 10 cents to close at $25.90 on volume of about 268,000 shares.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index was higher by 0.21% as the day ended, holding level from the 0.21% gain from early Thursday trading.

The iShares US Preferred Stock ETF was unchanged at $36.27.

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