Preferred stocks mixed going into long weekend; Vornado Realty paper firms on dividend news

By Stephanie N. Rotondo

Portland, Ore., May 25 - Preferred stocks were "kind of mixed overall," a market source reported Friday.

Volume was generally light given that many market players were gone or were planning early exits ahead of the long Memorial Day holiday weekend, he added.

"Everybody's taking an early weekend," another trader said.

First Republic Bank's newly priced $150 million issue of 6.2% series B noncumulative perpetual preferreds were seeing a bit of trading, though the securities had not yet freed to trade.

A trader said he heard the paper would free on Tuesday.

Meanwhile, Vornado Realty Trust preferreds were active in the secondary market. On Thursday, the company announced quarterly dividends on seven series of preferreds.

First Republic's 'strong bid'

One market source saw First Republic Bank's new issue trading at $24.88 in early gray market dealings, though he noted that it had "backed off" by midday, trading in a range of $24.70 to $24.76. The volume-weighted average price was $24.77, he said.

"It went pretty well," another trader said of the deal that priced Thursday via Morgan Stanley & Co. LLC, Bank of America Merrill Lynch and J.P. Morgan Securities LLC. "They were able to put it away pretty quickly."

The trader said there was a "strong bid" for the preferreds early in the session, seeing a $24.90 bid.

Price talk was originally 6.25% to 6.375% but was later revised to 6.25%, with chatter that it could go even lower.

Dividends are payable quarterly when and if declared by the board of directors.

San Francisco-based First Republic has applied to list the new preferreds on the New York Stock Exchange under the ticker symbol "FRCPB." Settlement is expected June 1.

Proceeds will be used for general corporate purposes, which may include funding loans or purchasing investment securities. The offering will also increase the bank's tier I capital, allowing it to offset a possible redemption of First Republic Preferred Capital Corp.'s 7.25% series D noncumulative perpetual preferred stock.

New issues remain busy

Among other recent deals, the 5.625% perpetual cumulative trust preference securities (NYSE: SCEPF) issued by Southern California Edison Co.'s SCE Trust I were trading busily. They closed up 15 cents at $24.60.

PNC Financial Services Group Inc.'s 6.125% fixed-to-floating-rate series P noncumulative perpetual preferreds (NYSE: PNCPP) were also better, rising 12 cents to $25.19.

Protective Life Corp.'s $250 million issue of 6.25% 30-year subordinated debentures (NYSE: PLPC) earned a dime, finishing the session at $24.85.

A trader said that Annaly Capital Management Inc.'s $275 million offering of 7.625% series C cumulative redeemable preferred stock had yet to list but that it has "been moving up." He pegged the paper at $24.90.

Vornado active

Vornado Realty Trust's preferreds were active and on the rise a day after the Paramus, N.J.-based real estate investment trust declared dividends on seven series of preferreds.

Of the seven issues, the 6.625% series I cumulative redeemable preferreds (NYSE: VNOPI) were the most active, trading up 8 cents to $25.37.

The dividend will be payable July 2.

© 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.