US banks are pulling back from selling preferred shares, favoring hybrid bonds with increased demand.

US banks, following JPMorgan Chase & Co., are pulling back from selling preferred shares, shrinking the market. While investors seek higher-yielding assets, assets under management in top funds have risen. Banks are paying off preferreds due to eased capital regulations. Non-financial companies are favoring hybrid bonds over preferreds.

Preferred-focused fund managers are seeking alternatives like hybrid bonds. With US banks decreasing preferred issuance, utilities are expected to supply more hybrids to meet infrastructure demands supporting AI. Non-financial corporates in the US sold $30 billion of hybrids last year and $10 billion in 2025, exceeding repayments through call options.

In a week in review, JPMorgan helped Warner Bros. Discovery restructure debt, banks joined a $5 billion debt deal for xAI Corp., New World Development closed an $11 billion refinancing deal, and SoftBank sold $4.2 billion of bonds. JPMorgan and UBS are preparing a debt package for Sycamore Partners’ buyout of UK pharmacy Boots.

Goldman Sachs is leading a transaction for Gray Media to refinance debt, Flora Food Group sold bonds rated junk, Vodafone received multi-billion bids for a debt sale, and Wolfspeed filed for bankruptcy to cut $4.6 billion in debt. AMC reached an agreement with creditors, while Merit Street Media, founded by Phil McGraw, filed for bankruptcy.

26North Partners is hiring bankers from JPMorgan and Deutsche Bank to grow investment-grade bets. BNP Paribas hired Denise Chow from Morgan Stanley, and Uros Stosic left Morgan Stanley to join Truist Financial as a managing director. Recent moves across lenders’ debt capital markets desks are on the rise.

Read more at Yahoo Finance: The Securities That Banks Are Backing Away From: Credit Weekly