Goldman Sachs sells massively upsized preferreds; Urstadt draws buyers; Discover to list

By Stephanie N. Rotondo

Phoenix, Oct. 17 - The Goldman Sachs Group Inc. announced the preferred deal of the day on Wednesday.

The New York-based investment bank said it intended to issue series I noncumulative perpetual preferreds. Price talk was initially 6.125% to 6.25% but was soon revised to 5.9% to 6%, according to a trader.

The expected $250 million deal eventually grew to $750 million and pricing came at 5.95%.

Meanwhile, Urstadt Biddle Properties Inc. priced an upsized offering of 7.125% series F cumulative redeemable preferreds.

The company had originally stated it would sell $75 million of the preferreds on Tuesday.

A trader said the deal was "very good" and that it had been attracting "a lot of buy interest."

Goldman triples deal size

Goldman Sachs Group priced a $750 million offering of series I noncumulative perpetual preferreds after the close on Wednesday.

The deal was initially slated to be $250 million.

Paper was trading at par in the gray market as of midday, a trader said.

After the bell, a trader said the deal had seen "a lot of demand," adding that it was "very institutional."

He quoted the issue at $25.03 bid, $25.10 offered.

Another market source saw the preferreds at $25.08 bid, $25.13 offered.

Goldman Sachs & Co. Inc. is the bookrunner. Joint lead managers are Bank of America Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC.

Proceeds will be used to provide additional funds for operations of the New York-based investment bank and for general corporate purposes.

Urstadt a 'very good deal'

Early in the session, Urstadt Biddle Properties priced $112.5 million of 7.125% series F cumulative redeemable preferreds.

The company had announced the sale on Tuesday and only $75 million of the securities were expected to be sold.

At midday, a trader said he saw a par bid for the preferreds, though no offers.

Another trader said the deal was 'very good," receiving "a lot of buy interest."

He also said he was seeing several par bids for the paper, but no offers.

The preferreds include a make-whole premium should the Greenwich, Conn.-based real estate investment trust redeem the issue prior to Oct. 24, 2017.

BMO Capital Markets is the bookrunner. Stifel Nicolaus & Co. Inc. and Deutsche Bank Securities Inc. are the joint lead managers. Co-managers are Wunderlich Securities Inc., J.J.B. Hilliard, W.L. Lyons, LLC and BNY Mellon Capital Markets, LLC.

Proceeds will be used for to redeem all outstanding series E preferreds and for general corporate purposes, which may include the redemption of the series C or D preferreds, the repayment of debt, the funding of capital improvements or the acquisition of properties.

Discover pops in trading

A trader reported that Discover Financial Services' $500 million of 6.5% series B noncumulative perpetual preferreds would list on the New York Stock Exchange on Thursday.

The deal priced Oct. 9. On Tuesday, the company said its greenshoe had been exercised, lifting total issuance to $575 million.

The ticker symbol is "DFSPB."

A trader said the issue "popped at the end of the day," pegging the prefereds at $25.41 bid.

Another market source saw the issue trading up 3 cents to $25.43 in very active dealings.

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.

Discover Financial Services is a Riverwoods, Ill.-based direct banking and payment services company.

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