Morning Commentary: First Republic adds deal to calendar; CIT issue launched; DDR frees to trade

By Stephanie N. Rotondo

Seattle, May 31 – The preferred stock new issue pipeline continued to flow on Wednesday as First Republic Bank announced plans to sell $150 million of series H noncumulative preferreds.

Price talk was 5.25%, a market source reported.

A trader noted that the deal was “small-ish, so it should be pretty tight.”

“I’m not seeing any offers yet, but I am sure it will do pretty well in the gray,” he added.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are running the books.

Meanwhile, a trader said that CIT Group Inc.’s previously announced sale up to $325 million of $1,000-par series A fixed-to-floating rate noncumulative preferreds had officially launched early Wednesday with a price target of 6%.

The deal was first announced on Tuesday. Morgan Stanley, Barclays and Credit Suisse Securities (USA) LLC are the joint bookrunners.

As for deals that already priced, DDR Corp.’s $175 million of 6.375% class A cumulative redeemable preferred shares had freed to trade as of mid-morning.

A trader quoted the issue at $25.05 bid, $25.15 offered.

The deal came Tuesday, tighter than the 6.5% to 6.625% price talk and increased from an expected $100 million.

Wells Fargo, RBC Capital Markets, Stifel Nicolaus & Co. Inc. and UBS Securities led the deal.

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