Morning Commentary: FAT Brands, Athene to tap market; Capital One, Public Storage lower

By James McCandless

San Antonio, Sept. 16 – The preferred market started the day modestly positive with the Wells Fargo Hybrid & Preferred Securities Financial index up by 0.03%, though top traders were trailing.

In the primary market, FAT Brands Inc. announced plans to price up to $30 million of $25-par series B cumulative preferred stock with a dividend of 8.25% in a best-efforts offering.

TriPoint Global Equities, LLC is the bookrunner.

Each share of the preferreds will come with a common stock purchase warrant for 0.60 of a share exercisable at $8.50 per share.

The preferreds are redeemable after one year at 110%, after two years at 105% and after three years at par. The company plans to redeem the preferreds after five years.

Meanwhile, Athene Holding Ltd. planned to price an offering of $25-par series B fixed-rate perpetual non-cumulative preference shares.

Wells Fargo Securities, LLC, BofA Securities, Inc., UBS Securities LLC and RBC Capital Markets, LLC are the joint bookrunners.

The preferreds are redeemable on or after Sept. 30, 2024 at par. Prior to that, they are redeemable after a tax event at par, within 90 days after a capital disqualification event at par, within 90 days after a rating agency event at $25.50 and at the vote of preferred shareholders at $26.00.

In the secondary, Athene’s established 6.35% series A fixed-to-floating rate perpetual non-cumulative preference shares were losing ground.

The preferreds (NYSE: ATHPrA) were down 10 cents to $26.55 on volume of about 139,000 shares.

In the finance space, Capital One Financial Corp.’s 5% series I fixed-rate non-cumulative perpetual preferreds were also declining as the session started.

The preferreds (NYSE: COFPrI) were falling 23 cents to $24.12 with about 151,000 shares trading.

Sector peer Wells Fargo & Co.’s 5.5% series X non-cumulative perpetual class A preferred stock followed the same path.

The preferreds (NYSE: WFCPrX) were off by 2 cents to $25.35 on volume of about 115,000 shares.

Real estate investment trust Public Storage’s 4.875% series I cumulative preferred shares were worse off in morning activity.

The preferreds (NYSE: PSAPrI) were declining by 9 cents to $24.85 with about 111,000 shares trading.

Insurance provider MetLife, Inc.’s 5.625% series E non-cumulative preferreds saw a negative start.

The preferreds (NYSE: METPrE) were down 11 cents to $27.27 on volume of about 39,000 shares.

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