Preferreds soft as equities decline; energy preferreds weaken; JPMorgan climbs

By Cristal Cody

Tupelo, Miss., Oct. 26 – After modest improvement on Thursday, preferreds stayed soft on Friday along with equities in general.

The Wells Fargo Hybrid and Preferred Securities index headed out down 0.15% but improved from a 0.23% drop over the morning. The index closed on Thursday up 0.20%.

The U.S. iShares Preferred Stock ETF ended the session off 0.33%, also slightly improved from the start of the day when the index was down 0.40%. The ETF closed on Thursday up 0.61%.

Equities remained weak over the day but recovered from wider losses in early trading.

The Dow Jones industrial average closed down 1.19%, the S&P 500 fell 1.73% and the Nasdaq declined 2.06% on Friday.

Preferred stocks were mixed in lighter trading volume.

New energy issues were weaker on Friday.

Dynagas LNG Partners LP’s 8.75% series B fixed-to-floating rate perpetual preferreds closed the day 10 cents, or 0.40%, softer at $24.60 on a trading volume of about 163,000 shares. The preferreds trade under the temporary symbol “DGAGF.”

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

DCP Midstream, LP’s 7.95% series C fixed-to-floating rate cumulative redeemable perpetual preferred units (B1/B/BB-) dropped 13 cents, or 0.53%, to $24.50 on Friday. Trading volume was about 63,000 shares.

The preferred units (NYSE: DCPPrC) were priced in a $100 million offering on Oct. 2 at par of $25.00.

Bank preferreds mixed

Preferred stocks in the bank and financial sector were mixed on Friday.

JPMorgan Chase & Co.’s 5.75% series DD non-cumulative preferred stock (NYSE: JPMPrD) climbed above par over the day. The trading volume was 2.12 million shares with the preferred stock ending the session up 3 cents, or 0.12%, to $25.01.

The preferreds closed Thursday up 13 cents, or 0.52%.

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

Bank of America Corp.’s 5.875% series HH non-cumulative preferred stock ended the day up 1 cent, or 0.04%, to $24.75 after softening at the start of the session with about 445,000 shares traded. The preferreds (NYSE: BACPrK) headed out on Thursday down 2 cents, or 0.08%.

Bank of America priced $854 million of the preferreds on July 17 at par of $25.00.

Other new bank and financial preferreds were mostly soft on Friday.

Associated Banc-Corp’s 5.875% series E non-cumulative perpetual preferred stock (Baa3/BB) fell 14 cents, or 0.58%, to $24.00 on volume of about 142,000 shares.

The bank holding company sold $100 million of the $25-par notes (NYSE: ASBPrE) on Sept. 19.

U.S. Bancorp’s 5.5% series K non-cumulative perpetual preferred stock (NYSE: USBPrP) declined 7 cents, or 0.28%, to $24.70 on volume of about 386,000 shares.

The preferreds were priced in a $575 million offering at $25-par on Aug. 7.

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