Preferreds edge lower; JPMorgan, U.S. Bancorp preferreds improve; DCP, Dynagas rise

By Cristal Cody

Tupelo, Miss., Oct. 24 – Preferreds remained mostly soft on Wednesday as stocks headed out in the red for another consecutive session. Recent issues, however, showed modest gains.

After closing Tuesday down 0.22%, the Wells Fargo Hybrid and Preferred Securities index edged another 0.4% lower on the day.

The U.S. iShares Preferred Stock ETF closed the session down 0.36% after closing Tuesday off 0.30%.

Primary action has been light with one preferred stock deal priced week to date. On Monday, Citizens Financial Group, Inc. sold $300 million, or 300,000 shares, of fixed-to-floating rate non-cumulative perpetual preferred stock (BB+/BB-) with a 6.375% dividend. The preferreds will not be listed on any exchange.

In the secondary market during Wednesday's session, new issues improved modestly.

JPMorgan Chase & Co.’s 5.75% series DD non-cumulative preferred stock ended the day 2 cents, or 0.08%, improved at $24.87 with a trading volume of 2.31 million shares.

The preferreds (NYSE: JPMPrD) closed flat on Tuesday at $24.83.

JPMorgan sold $1.7 billion of the $25-par perpetual preferred shares on Sept. 17.

U.S. Bancorp’s 5.5% series K non-cumulative perpetual preferred stock (NYSE: USBPrP) closed up 12 cents, or 0.49%, to $24.60 on volume of about 399,500 shares.

The $575 million of $25-par preferreds priced on Aug. 7.

In other new issue secondary trading, DCP Midstream, LP’s 7.95% series C fixed-to-floating rate cumulative redeemable perpetual preferred units (B1/B/BB-) traded 13 cents, or 0.53%, better at $24.68 on volume of 79,000 shares. The preferreds (NYSE: DCPPrC) ended the previous session down 27 cents, or 1.08%, at $24.55.

DCP Midstream brought $100 million of the preferreds to the primary market on Oct. 2 at par of $25.00.

Also improved on the day, Dynagas LNG Partners LP’s 8.75% series B fixed-to-floating rate perpetual preferreds rose 7 cents, or 0.28%, to $24.75 on a trading volume of about 235,000 shares.

The preferred shares, traded under the temporary symbol “DGAGF,” closed Tuesday 8 cents, or 0.32%, weaker at $24.62.

Dynagas sold $55 million of the $25-par preferreds on Oct. 16.

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