Discover Financial prices $570 million; CIM offers units; Golar, RiverNorth improve

By Cristal Cody

Tupelo, Miss., Oct. 26 – Discover Financial Services, Inc. priced $570 million of depositary shares (Ba3/BB-/BB-) that each represent 1/100th of an interest in its 5.5% $1,000-par fixed-to-floating rate perpetual preferred stock on Thursday.

CIM Commercial Trust Corp. also announced plans on Thursday to price up to 900,000 series L units that consist of 9 million shares of its series L preferred stock.

Primary action has picked up with a handful of deals priced in October.

Issuance is expected to continue at about “the same rate through early December,” assuming continued strength in the credit markets, a source said.

Preferreds ended Thursday flat to modestly better after softening in the previous session.

The Wells Fargo Hybrid and Preferred Securities index closed flat.

The U.S. iShares Preferred Stock ETF was mostly unchanged.

Golar LNG Partners LP’s $120 million of 8.75% series A perpetual cumulative redeemable preferred units that priced on Tuesday were up 4 cents at $24.94 in trading.

The preferreds were issued the temporary symbol “GOLPF” on Wednesday.

Golar LNG Partners sold $120 million of the preferred units on Tuesday at $25.00 per unit.

The Hamilton, Bermuda-based owner and operator of liquid natural gas carriers will apply to list the preferred units on the Nasdaq Global Select Market under the symbol “GMLPP.”

Also on Thursday, RiverNorth Marketplace Lending Corp. listed for trading its 5.875% series A term preferred shares due Oct. 31, 2024 on the New York Stock Exchange under the symbol “RMPL.”

The preferreds closed up 5 cents at $25.20.

RiverNorth priced $36 million of the 5.875% series A term preferreds at par with a $25.00 liquidation preference on Oct. 18.

The Chicago-based closed-end management investment company sold 1.44 million preferreds. The deal includes an over-allotment option for 216,000 shares for an additional $5.4 million.

Discover Financial prices

Discover Financial Services priced $570 million of depositary shares, which each represent 1/100th of an interest in its 5.5% series C fixed-to-floating rate non-cumulative perpetual preferred stock, according to an FWP filing with the Securities and Exchange Commission.

The dividend will have a fixed rate until Oct. 30, 2027 and then will convert to a floating coupon at Libor plus 307.6 bps.

Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., BofA Merrill Lynch and RBC Capital Markets, LLC were the bookrunners.

The preferreds are redeemable on any dividend payment date on or after Oct. 30, 2027 at $100,000 per preferred, which is equivalent to $1,000 per depositary share, plus any unpaid dividends.

Proceeds will be used for general corporate purposes, including advances to company subsidiaries, debt repayment, repurchases and redemptions of securities, including potentially redeeming the company’s 6.5% series B preferreds, which are eligible for redemption beginning on Dec. 1.

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

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