Digital Realty upsized, pricing tightened; National General’s $25-par notes underperform

By Stephanie N. Rotondo

Phoenix, Aug. 13 – A new deal entered the preferred stock calendar on Thursday, even as the market opened with a weaker tone.

The Wells Fargo Hybrid and Preferred Securities index closed just slightly lower, slipping 2 basis points. The index was off 8 bps at mid-morning, following the downward trend of the broader markets.

The equity markets ultimately closed mixed, with the Dow Jones industrial average recovering some of its recent losses. The rebound came as investors’ concerns about China ebbed and fresh domestic economic data indicated there was strength in the economy.

As for the new issue, Digital Realty Trust Inc. brought $250 million of 6.35% series I cumulative redeemable perpetual preferreds.

The issue was initially talked around 6.5%, with $150 million shares expected to be sold.

The deal was led by Morgan Stanley & Co. LLC, BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

By the bell, the preferreds had moved up to a $24.90 bid, $24.92 offered market, according to one market source.

Among other deals from the week, National General Holdings Corp.’s $100 million of 7.625% $25-par subordinated notes due 2055 were free to trade, with a trader seeing a $24.60 bid for paper.

He noted that the issue traded at $24.65.

Another source said the notes were “among the most active” securities of the day, closing at $24.60.

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