Midday Commentary: Taubman Centers planning new issue; Glimcher, Affiliated deals on the rise

By Stephanie N. Rotondo

Phoenix, Aug. 2 - New and coming issues were doing well in the preferred stock market on Thursday.

Taubman Centers Inc. announced an offering of at least $75 million series J cumulative redeemable perpetual preferred shares on Thursday.

Price talk is 6.5% to 6.625%, according to a trader. He saw the issue trading at $24.90 in the gray market.

Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunners. PNC Financial Group Inc. is a co-manager.

Proceeds will be used to redeem all or a portion of $187 million series G and H preferreds. If there are any remaining funds, the company will use the money to reduce outstanding borrowings under a $715 million revolving line of credit and/or for general corporate purposes.

The soon-to-be-redeemed issues were meantime trading downward.

The 7.625% series H preferreds (NYSE: TCOPH) fell 43 cents, or 1.66%, at midday to $25.40. The 8% series Gs (NYSE: TCOPG) declined 45 cents, or 1.74%, to $25.45.

In recently priced deals, Glimcher Realty Trust's $90 million of 7.5% series H cumulative redeemable perpetual preferred shares of beneficial interest were moving up to $24.95 bid, $25.05 offered, according to a trader.

And, Affiliated Managers Group Inc.'s $200 million of 6.375% $25-par senior notes due Aug. 15, 2042 inched up to $25.30 bid, the trader said.

The trader remarked that at least three to four real estate investment trusts are expected to bring new issues soon. Furthermore, he expected to see quite a bit more REIT issues before banks started entering the market again.

Meanwhile, Knight Capital Group's computer glitch on Wednesday - which caused erroneous trades in as many as 150 New York Stock Exchange-listed securities - said it had fixed the problem as of Thursday, though not before it lost $440 million.

Knight has said that the resulting loss of market capitalization has forced it to search for either a capital infusion or a prospective buyer.

Still, a trader said there was "not a lot of fallout" from the debacle.

"It will be interesting to see if anyone takes them over," he said, noting that Knight handles quite a lot of business.

Knight common stock (NYSE: KCG) was down $3.91 at midday, or 56.37%, to $3.03.

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