The Securities That Banks Are Backing Away From: Credit Weekly

US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.’s lead and retreating from the securities, even as investors are eager to buy them.

Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn’t happened since the lenders were replacing obsolete capital after the global financial crisis.