Midday Commentary: Discover Financial planning new deal around 6.5%; recent deals list on NYSE

By Stephanie N. Rotondo

Phoenix, Oct. 9 - It was a "slow but steady" Tuesday for the preferred stock market, a trader reported.

"We're generally weaker with the equity markets," he added.

The nom du jour was Discover Financial Services Inc., which announced plans for a sale of series B noncumulative perpetual preferreds early in the session.

Price talk was initially 6.75% to 6.875%, a trader said. However, another trader reported that the talk had been readjusted to around 6.5%.

"They've already closed the book," he said, opining that the deal should do well around the readjusted price talk despite being a lower-rated financial than some others that have recently tapped the market. "People are probably getting sick of loading up portfolios with 5% perpetual paper."

The trader said the issue had been trading around $24.90 in the gray market as of midday.

The joint bookrunners are Bank of America Merrill Lynch, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds will be used for general corporate purposes, which may include advances to subsidiaries to finance their activities, repayment of outstanding debt and repurchases and redemptions of issued and outstanding securities of Discover Financial Services and its subsidiaries.

Meanwhile, three recent deals were admitted to the New York Stock Exchange Tuesday.

CBL & Associates Properties Inc.'s 6.625% series E cumulative redeemable preferreds - a $150 million issue that priced Sept. 28 and was later increased to $172.5 million via a greenshoe - listed under the ticker symbol "CBLPE."

The paper was up 12 cents at midafternoon, trading at $25.29.

Ares Capital Corp.'s 5.875% $25-par senior notes due 2022 listed under the ticker symbol "ARU." The $175 million deal came Sept. 21.

The notes were down 8 cents at midday at $24.95.

And Miller Energy Resources Inc.'s 10.75% series C cumulative preferreds hit the NYSE under the ticker symbol "MILLPC." The $17.13 million "best-efforts" offering priced Sept. 28.

Paper was trading at $22.30, down a nickel.

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