AT&T taps $25-par market; New Residential under par; Wells Fargo preferreds negative

By James McCandless

San Antonio, Feb. 12 – In the middle of the week, the preferred market experienced blanket negativity.

Telecom services provider AT&T, Inc. priced a $1.75 billion offering of $25-par series C perpetual preferred stock on Wednesday with a dividend of 4.75% at par.

The company’s established 5% series A cumulative perpetual preferred stock dropped.

Leading volume on its first day, REIT New Residential Investment Corp.’s new $350 million 6.375% series C fixed-to-floating rate cumulative redeemable preferred stock finished below par.

Sector peer AGNC Investment Corp.’s recent 6.125% series F fixed-to-floating rate cumulative redeemable preferred stock was also under pressure.

Meanwhile, Wells Fargo & Co.’s 4.75% series Z non-cumulative perpetual class A preferreds weakened by the end of the session.

Also in the finance space, Capital One Financial Corp.’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock followed the market downward.

AT&T prices

Coming down the primary pipeline, telecom services provider AT&T priced a $1.75 billion offering of $25-par series C perpetual preferred stock (Ba1/BB+/BBB) with a dividend of 4.75% at par.

There is no greenshoe.

BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC were the bookrunners.

Dividends are payable on Feb. 1, May 1, Aug. 1 and Nov. 1, commencing on May 1, 2020.

The preferreds are redeemable on or after Feb. 18, 2025 at par. Prior to that, the preferreds are redeemable within 90 days after a ratings event at $25.50.

The company’s established 5% series A cumulative perpetual preferred stock saw a drop.

The preferreds (NYSE: TPrA) were pushed down 43 cents to close at $25.97 on volume of about 1 million shares.

New Residential trades

Leading secondary market volume on its first day, real estate investment trust New Residential’s new $350 million 6.375% series C fixed-to-floating rate cumulative redeemable preferred stock finished below par.

The preferreds, trading under the temporary symbol “NRESP,” closed at $24.90 on volume of about 4.5 million shares.

The deal priced on Tuesday.

Sector peer AGNC’s recent 6.125% series F fixed-to-floating rate cumulative redeemable preferred stock was also under pressure by the end of the afternoon.

The preferreds (Nasdaq: AGNCP) declined by 4 cents to close at $24.89 with about 870,000 shares trading.

On Tuesday, the preferreds rose 5 cents.

Wells Fargo weaker

Meanwhile, Wells Fargo’s 4.75% series Z non-cumulative perpetual class A preferreds weakened by the end of the session.

The preferreds (NYSE: WFCPrZ) shaved off 8 cents to close at $25.47 on volume of about 1.1 million shares.

On Tuesday, the preferred went unchanged.

Also in the finance space, Capital One’s 4.8% series J fixed-rate non-cumulative perpetual preferred stock followed the market downward.

The preferreds (NYE: COFPrJ) lost 5 cents to close at $24.95 with about 872,000 shares trading.

On Tuesday, the preferreds picked up 6 cents.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index ended the session worse off by 0.34%, reversing a 0.01% gain from early Wednesday trading.

The iShares US Preferred Stock ETF was down 6 cents to $38.23.

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