Morning Commentary: State Street, Deutsche plan deals; preferreds firm

By Stephanie N. Rotondo

Phoenix, Nov. 18 – Two new deals were added to the preferred stock calendar on Tuesday.

State Street Corp. announced plans to sell series E fixed-rate noncumulative perpetual preferreds, with initial price talk set in a 6.125% to 6.25% range.

“It’s doing well, they might even be able to price it around 6%,” a trader said.

He said the paper was trading at less 8 cents in the early gray market.

“It’s a pretty standard type of State Street listing,” the trader remarked.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Proceeds will be used for general corporate purposes.

Deutsche Bank AG meantime is shopping a benchmark offering of noncumulative perpetual tier 1 notes (expected ratings: Ba3/BB/BB+).

Price talk is in the 7.5% area.

Deutsche Bank Securities Inc. is the sole bookrunner.

The notes become callable on April 30, 2025 and can then be redeemed every five years, only if fully written up and subject to regulatory approval.

Overall, the preferred market continued to be on the firm side, maintaining Monday’s tone.

The Wells Fargo Hybrid and Preferred Securities Index was up 4 basis points at mid-morning. It had risen 19 bps during the previous session.

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