B. Riley taps $25-par market; Digital Realty preferreds top par; AGNC negative

By James McCandless

San Antonio, Oct. 2 – Wednesday’s preferred market session was marked by negativity sustained throughout the day.

B. Riley Financial, Inc. priced an upsized $50 million offering of $25-par series A cumulative perpetual preferred stock at par with a dividend of 6.875%.

Leading trading in the secondary, REIT Digital Realty Trust, Inc.’s new $300 million 5.2% series L cumulative redeemable preferred stock topped par.

Sector peer AGNC Investment Corp.’s recent 6.5% series E fixed-to-floating rate cumulative redeemable preferreds were under pressure.

In the finance space, Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferred stock ended weaker.

Meanwhile, Bank of America Corp.’s 5% series LL non-cumulative preferred stock gained, going against the trend.

Goldman Sachs Group, Inc.’s series D floating rate non-cumulative preferreds dove.

B. Riley’s deal

B. Riley priced an upsized $50 million offering of $25-par series A cumulative perpetual preferred stock at par with a dividend of 6.875%.

There is a $7.5 million greenshoe.

The deal, announced Wednesday morning, was upsized from an initial $35 million and matched talk for a yield in the 6.875% area.

B. Riley FBR, Inc., Incapital LLC, Janney Montgomery Scott LLC and Ladenburg Thalmann & Co. LLC are the joint bookrunners.

The preferreds are redeemable on or after Oct. 7, 2024 at par. Prior to that, the preferreds are redeemable within 90 days after a delisting event at par and within 120 days after a change-of-control at par.

Digital Realty trades

Leading secondary trading, real estate investment trust Digital Realty’s new $300 million 5.2% series L cumulative redeemable preferred stock finished its first day above par.

The preferreds, trading under the temporary symbol “DLRTP,” were seen closing at $25.03 on volume of about 2.9 million shares.

The deal priced on Tuesday.

Sector peer AGNC’s recent 6.5% series E fixed-to-floating rate cumulative redeemable preferreds spent the day under pressure.

The preferreds, trading under the temporary symbol “AGNIP,” lost 1 cent to close at $25.04 with about 348,000 shares trading.

On Tuesday, the preferreds were active but unchanged.

Morgan Stanley weaker

Elsewhere, in the finance space, Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferred stock closed weaker.

The preferreds (NYSE: MSPrK) dropped 19 cents to close at $27.09 on volume of about 933,000 shares.

On Tuesday, the preferreds fell 2 cents.

Meanwhile, Bank of America’s 5% series LL non-cumulative preferred stock gained, going against Wednesday’s prevailing trend.

The preferreds (NYSE: BACPrN) picked up 6 cents to close at $25.66 with about 632,000 shares trading.

Goldman Sachs’ series D floating rate non-cumulative preferreds dived by the end of the session.

The preferreds (NYSE: GSPrD) declined by 17 cents to close at $21.78 on volume of about 512,000 shares.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.20% at the end of the afternoon after a 0.23% drop in early Wednesday activity.

The iShares US Preferred Stock ETF was down 15 cents to $37.17.

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