AGNC Investment prices upsized preferreds; Arch Capital free to trade; recent deals eyed

By Stephanie N. Rotondo

Seattle, Aug. 15 – The preferred stock new issue market continued to see a steady deal flow as AGNC Investment Corp. priced a $300 million offering of 7% series C fixed-to-floating rate cumulative redeemable preferred stock.

Price talk was 7% to 7.125%, according to a market source.

The size of the deal was increased from $150 million.

The paper was seen at $24.62 bid, $24.90 offered in the early gray market.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, J.P. Morgan Securities LLC, RBC Capital Markets LLC and Keefe Bruyette & Woods Inc. are running the books.

The company intends to use come of the deal’s proceeds to redeem all of its 8% series A cumulative redeemable preferreds (Nasdaq: AGNCP). In the wake of the announcement, the series As declined a dime to $25.27 in well above-average trading.

Meanwhile, Arch Capital Group Ltd.’s $200 million of 5.45% series F noncumulative preferreds – a deal priced Monday – freed shortly before lunchtime.

The issue was assigned a temporary ticker, “AHCCF.”

At the close, the preferreds were seen at $24.82, up 32 cents, or 1.31%. Over 3.91 million of the preferreds changed hands.

Prior to freeing from the syndicate, a trader pegged the preferreds at $24.75 bid, $24.80 offered in the gray.

The deal came in line with revised price talk. Initial price talk was 5.5%.

The issue was also increased from an expected $150 million.

BofA Merrill Lynch, Morgan Stanley, Wells Fargo Securities LLC and JPMorgan are the bookrunners.

Among last week’s deals, Cherry Hill Mortgage Investment Corp.’s $55 million of 8.2% series A cumulative redeemable preferreds were on the active side, firming a dime to $24.90.

Nearly 723,600 shares were exchanged.

The deal priced Thursday. A temporary ticker of “CHMMP” was given to the issue on Friday after the deal freed from the syndicate.

The company’s inaugural issue came tighter than the 8.25% price talk.

Morgan Stanley and RBC Capital Markets were the bookrunners.

Invesco Mortgage Capital Inc.’s $250 million of 7.5% fixed-to-floating rate series C cumulative redeemable preferred stock – a deal priced Wednesday – were meantime seen at $24.95, unchanged day over day, but up from $24.93 at the open.

Almost 582,700 shares traded during the session.

That issue also has a temporary symbol, “IVSOP.”

The deal came at the tight end of the revised 7.5% to 7.625% price talk. Initially, price talk was 7.625%.

Morgan Stanley, BofA Merrill Lynch, UBS Securities LLC and JPMorgan ran the books.

And, Kimco Realty Corp.’s $225 million of 5.125% class L cumulative redeemable preferreds – a deal that priced Aug. 7 – were seen at closing at $24.70, a gain of a dime.

About 1.13 million of the preferreds were traded.

The issue trades under the temporary ticker “KIMRP.”

The preferreds came tight to the 5.125% to 5.25% price talk. The size of the deal was increased from $150 million.

BofA Merrill Lynch, Morgan Stanley, UBS Securities and Wells Fargo Securities led the deal.

As for deals from earlier in the month, Digital Realty Trust Inc.’s $200 million of 5.25% series J cumulative redeemable preferred stock were admitted to the New York Stock Exchange on Tuesday under the ticker symbol “DLRPrJ.”

The preferreds finished the session at $24.56, up 16 cents.

The deal priced on Aug. 2, coming tighter than the 5.375% price talk. The issue was also upsized from $100 million.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo were the bookrunners.

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