Charles Schwab to issue preferreds; Cedar Realty plans at-the-market offering, redemption

By Stephanie N. Rotondo

Portland, Ore., May 29 - The preferred stock market kicked off the shortened trading week with news from Charles Schwab Corp.

The San Francisco-based investment firm said Tuesday it plans to sell at least $200 million of series B noncumulative perpetual preferreds. Price talk is 6% to 6.125%, and pricing is expected Wednesday morning, according to a market source.

Cedar Realty Trust Inc. meantime announced an "at-the-market" offering of its 7.25% series B cumulative redeemable preferred stock. The company said it will issue up to $100 million of the preferreds, which is in addition to the $10 million issued May 22.

The news of the add-on was in addition to news that the company is planning a partial redemption of its 8.875% series A cumulative redeemable preferreds.

Among recent deals, First Republic Bank's $150 million issue of 6.2% series B noncumulative perpetual preferreds freed to trade, a trader said. The issue priced Thursday.

And Annaly Capital Management Inc.'s 7.625% series C cumulative redeemable preferred stock listed on the New York Stock Exchange Tuesday under the symbol "NLYPC." That issue priced May 9.

In the secondary realm, foreign banks ended the day mixed as market players' fears about Europe - specifically Greece and Spain - waxed and waned.

The news was "more negative than positive," a source said. "But obviously not everybody thinks that."

Schwab heralds new deal

Charles Schwab will sell at least $200 million of series B noncumulative perpetual preferreds, the company said in a regulatory filing on Tuesday.

Price talk on the preferreds (expected Baa2/BBB+/BB+) is 6% to 6.125%, according to a trader. Another source said pricing was expected Wednesday morning.

"It seems to have a pretty good retail buzz on it," the first trader said, seeing paper at $24.75 in the gray market around midday.

The second source quoted the preferreds at $24.70 bid, $24.75 offered.

The company has applied to list the new preferreds on the NYSE under the symbol "SCHWPB."

Bank of America Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include extending credit to or funding investments in subsidiaries and the possible refinancing of outstanding debt obligations.

Cedar Realty selling shares

Cedar Realty Trust announced an at-the-market sale of up to $100 million, or 4 million shares, of its 7.25% series B cumulative redeemable preferred stock.

The Port Washington, N.Y.-based real estate investment trust originally issued $10 million, or 400,000, of the preferreds on May 22.

However, a trader said he was seeing very little action in the name.

"That best-efforts stuff, brokers don't take much interest in it."

The preferreds (NYSE: CDRPB) closed up 14 cents at $23.15.

MLV & Co. LLC is the sales agent.

Proceeds from any potential sale will be used for general corporate purposes, including potential future repurchases or redemptions of the company's outstanding 8.875% series A cumulative redeemable preferreds and/or the repayment of debt.

Also on Tuesday, the company announced a partial redemption of 360,000 of its series A preferreds.

The preferreds will be redeemed at par plus accrued dividends on June 28. The total redemption price will be $25.24.

The issue (NYSE: CDRPA) was unchanged at $25.15.

First Republic frees

A trader said First Republic Bank's $150 million issue of 6.2% series B noncumulative perpetual preferreds - an issue that priced Thursday - had freed to trade and placed the paper at $24.80 in the gray market around midday.

After the bell, a market source said the issue was the day's most active security, seeing it end up 23 cents at $24.93.

First Republic has applied to list the new preferreds on the NYSE under the ticker symbol "FRCPB." Settlement is expected Friday.

Morgan Stanley & Co. LLC, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners.

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.

Annaly lists on NYSE

Annaly Capital Management's 7.625% series C cumulative redeemable preferred stock listed on the NYSE Tuesday under the symbol "NLYPC."

The $275 million issue priced May 9.

The preferreds ended the session at $24.90.

Annaly is based in New York.

Europe plays tug-of-war

The secondary market continued to feel the push-and-pull of Europe's woes Tuesday as investors pondered Spain's financial situation and news that Greek polls showed the bailout-favoring candidates were gaining in favor.

Still, with no real clarity on the situation, foreign banks ended the day in mixed fashion.

Royal Bank of Scotland Group plc was quite active but followed the mixed trend. The 5.9% noncumulative trust preferreds (NYSE: RBSPE) ended up 25 cents, or 1.83%, at $13.93. The 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT), however, closed down a nickel at $19.11.

Aegon NV's 6.375% perpetual capital securities (NYSE: AEH) earned 30 cents, or 1.27%, to finish at $23.86, while Spanish bank Banco Santander SA saw its 10.5% noncumulative guaranteed series 10 preferreds (NYSE: STDPE) decline 34 cents, or 1.33%, to $25.31.

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