Recently priced deals in play; OM notes free up; Public Storage steady; Deutsche dips

By Stephanie N. Rotondo

Seattle, July 28 – The preferred stock primary market took a breather on Thursday after pushing out a few deals earlier in the week.

From Wednesday’s business, OM Asset Management plc’s $125 million of 5.125% $25-par senior notes due 2031 were seen offered at $24.92 in early trading.

“They have been trading right around that $24.90 area,” a trader said.

Later in the day, the issue freed to trade, according to a market source.

That source said the notes ended at $25.34, but added that the volume weighted average price was “only $24.906... the latter is probably more indicative of the real market level.”

The deal came upsized from $100 million and tighter than the 5.25% area talk. BofA Merrill Lynch, Wells Fargo Securities LLC and Citigroup Global Markets Inc. ran the books.

From Tuesday, Capital One Financial Corp.’s $600 million of 5.2% series G noncumulative preferreds were “sitting around par, $25.02,” according to a trader.

A source said the preferreds finished at $25.06 but placed the VWAP at $25.02.

That issue came tight to the 5.37% to 5.5% talk and was upsized from $250 million. BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo led the deal.

As for Monday’s new issue, Bank of New York Mellon Corp.’s $1 billion of 4.625% $1,000-par series F fixed-to-floating rate noncumulative preferreds were seen closing at 102, “but that was the high trade of the day,” a source said.

He said the VWAP of 99.87 was likely a more accurate level.

Deals from earlier in the month also remained in focus. Dominion Resources Inc.’s $800 million of 5.25% 2016 series A $25-par enhanced junior subordinated notes due 2076 (NYSE: DRUA) – a deal priced July 12 – improved a dime to $25.24. However, Public Storage’s $300 million of 4.95% series D cumulative preferreds (NYSE: PSAPD) were meantime holding around the $24.99 area.

That issue came July 13.

Aside from new and recent issues, Deutsche Bank AG paper remained weak following the German bank’s earnings release on Wednesday, in which the company reported a 19% decline in net revenue.

The 7.6% trust preferred securities (NYSE: DTK) dropped 6 cents to $25.66.

The German bank has been going full-bore on cost-cutting efforts, as trading revenues have declined. For the second-quarter, the bank’s securities trading unit saw its revenue fall 28%. That helped push down net income to €18 billion from €796 million a year ago.

Total net revenue dropped 19% to €7.39 billion.

Restructuring and severance costs also pressured the bottom line, as that amount swelled to €207 million from €45 million.

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