Midday Commentary: TCF to price new issue; Public Storage lists; foreign banks bouncing back

By Stephanie N. Rotondo

Phoenix, June 18 - The preferred stock market began the week with a new issue announcement by TCF Financial Corp.

The Wayzata, Minn.-based bank holing company for TCF National Bank is looking to sell at least $100 million of series A noncumulative perpetual preferred stock. Talk is around 7.75%.

A trader saw the paper trading at $24.95 in the gray market at midday.

Proceeds from the sale will be used to redeem the bank's 10.75% series I junior subordinated notes (NYSE: TCBPA).

The notes were trading at $25.45, down 20 cents, at midday.

"We'll probably see a lot more of these issues," the trader said. "It sounds like it's going to be a pretty heavy book as long as retail keeps picking it up."

He added that even some funds were looking into preferred investment opportunities.

Elsewhere in the primary, Public Storage's 5.625% series U cumulative preferred stock officially listed on the New York Stock Exchange Monday under the symbol "PSAPU."

The preferreds were holding in around $25.10.

Also, NextEra Energy Capital Holdings Inc.'s $325 million issue of 5.625% $25-par series H junior subordinated debentures due 2072 are expected to list on Tuesday.

With the Greek election that occurred Sunday lessening fears of the country's possible euro exit, a trader said that "we were expecting some of the foreign banks to bounce back."

That expectation proved true Monday. Preferreds from Deutsche Bank AG, Royal Bank of Scotland Group plc, ING Groep NV and Aegon NV were rebounding.

"That could be short-covering too," the trader speculated, noting that all of those institutions still have some level of exposure to Spain.

Deutsche Bank's 7.6% trust preferreds (NYSE: DTK) were up 12 cents at $25.35 in midday trading, while RBS' 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) were up 43 cents, or 2.27%, at $19.35. ING's 7.375% perpetual hybrid capital securities (NYSE: IDG) had gained 8 cents to trade at $23.71, and Aegon's 6.375% perpetual capital securities (NYSE: AEH) earned 17 cents, trading around $22.86.

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