Morning Commentary: American Finance sells preferreds; Brighthouse, Morgan Stanley down

By James McCandless

San Antonio, March 22 – Early activity in the primary market outshined secondary movement as the Wells Fargo Hybrid & Preferred Securities Financial index opened down by 0.15%.

American Finance Trust, Inc. priced a downsized $30 million offering of series A cumulative redeemable perpetual preferred stock at par with a dividend of 7.5%.

There is a $4.5 million greenshoe.

The offering, announced on Thursday, was downsized from an initial $100 million and came in at the top end of talk for a dividend of 7.25% to 7.5%.

BMO Capital Markets Corp. and Stifel, Nicolaus & Co., Inc. are the joint bookrunners.

The preferreds are redeemable on or after March 26, 2024. Prior to that, they are redeemable within 90 days after a delisting event and 120 days after a change-of-control event.

Also, Affiliated Managers Group Inc. detailed its new $280 million sale of $25-par junior subordinated notes (Baa1/BBB) due March 30, 2059 at par with a coupon of 5.875%.

There is a $42 million greenshoe.

The offering was announced Thursday morning.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, Wells Fargo Securities, LLC and RBC Capital Markets, LLC are the joint bookrunners.

The notes are redeemable on or after March 30, 2024 at par. Prior to that, they are redeemable after a tax event or a rating agency event.

In the secondary, Brighthouse Financial, Inc.’s new 6.6% series A non-cumulative preferred stock started the session declining.

The preferreds, trading under the temporary symbol “BHFLL,” were down 2 cents to $25.28 on volume of about 179,000 shares.

Meanwhile, in finance, Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferreds were also lower.

The preferreds (NYSE: MSPrK) dipped 3 cents to $25.90 with about 37,000 shares trading.

Sector peer Citigroup, Inc.’s 7.125% series J fixed-to-floating rate non-cumulative preferred stock were trailing.

The preferreds (NYSE: CPrJ) lost 11 cents to $27.40 on volume of about 31,000 shares.

Elsewhere, real estate investment trust AGNC Investment Corp.’s 6.875% series D fixed-to-floating rate cumulative redeemable preferreds followed the negative path.

The preferreds (Nasdaq: AGNCM) were off by 2 cents to $25.02 with about 24,000 shares trading.

Asset manager Legg Mason, Inc.’s 5.45% junior subordinated notes due 2056 were doing better in early trading.

The notes (NYSE: LMHB) were up 2 cents to $24.10 on volume of about 24,000 notes.

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