BNY Mellon prices benchmark issue of $1,000-par preferreds; Dominion lists; Ally firms

By Stephanie N. Rotondo

Seattle, July 25 – Chatter of a possible preferred stock deal planned for Monday proved correct, as Bank of New York Mellon Corp. announced an offering of $1,000-par series F fixed-to-floating rate noncumulative preferreds.

The deal was initially talked in a 4.875% context but came at 4.625%, according to a market source.

$1 billion of the preferreds were sold at par.

“I imagine it’s going to trade at a premium right away, because most of the $1,000-pars usually do,” a trader said.

Post-pricing, a source saw the issue offered at 100.25.

As the market digested the new deal, the 5.2% $25-par series C noncumulative preferreds (NYSE: BKPC) traded off 3 cents to $26.46.

BofA Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and BNY Mellon Capital Markets LLC ran the books.

Dividends will be set at a fixed rate through Sept. 20, 2026 and will be paid on a semiannual basis. After Sept. 20, 2026, the rate will float at Libor plus 313.1 basis points and will be paid on a quarterly basis.

Proceeds will be used to fund a common stock repurchase plan of up to $560 million. The repurchases will be proportionally reduced should the New York-based financial services firm sell less than $750 million of the new preferreds.

Any remaining funds will be used for general corporate purposes.

Last week, market sources had been reporting that there was talk of a new issue from a financial, but it wasn’t clear who it would be.

Dominion lists, Ally gains

Dominion Resources Inc.’s $800 million of 5.25% 2016 series A $25-par enhanced junior subordinated notes due 2076 were admitted for trading on the New York Stock Exchange on Monday.

The ticker is “DRUA.” The deal came July 12.

The notes closed at $25.07, up from $24.94 at the open. The issue was also quite active for the day, with over 950,000 notes being exchanged.

In terms of volume, the notes came second only to Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities (NYSE: ALLYPA), which traded over 1 million times for the day.

The preferreds finished 2 cents better at $25.10.

Ally is set to release its second-quarter results on Tuesday morning.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.