Market subdued; First Republic frees up; JPMorgan over par; Boston Private taps market

By Stephanie N. Rotondo

Phoenix, April 17 - A preferred stock trader said the market was on the quiet side Wednesday, even as Bank of America Corp. reported earnings.

"They didn't beat estimates, but they were strong," he said, opining that investors seemed "pretty comfortable" with the numbers.

The trader also said he had heard that there was not going to be any new issues announced for the remainder of the week, especially given that the Women's Syndicate Association's annual cocktail reception was set to occur on Thursday in New York.

"We may see something out of [Bank of America], but probably not until the first of the week," he said.

According to another trader, BofA was expected to bring the deal on Wednesday, but it was postponed until Thursday due to the declining equity markets. He said if the market was soft again on Thursday, it would likely be next week before it was announced.

In recent deals, First Republic Bank's $175 million issue of 5.5% series D noncumulative preferreds freed to trade at midday after pricing on Tuesday.

A trader quoted the issue at $24.85 bid, par offered.

Also from Tuesday, JPMorgan Chase & Co.'s $1.5 billion offering of 5.15% $1,000-par series Q fixed-to-floating rate noncumulative preferreds were pegged at "101 locked," according to a trader.

Other market sources also placed the issue in the 101 area.

Boston Private prices

Boston Private Financial Holdings Inc. brought $50 million of 6.95% series D noncumulative perpetual preferreds on Wednesday.

"It didn't really do phenomenally," a trader said. "There wasn't a lot of institutional buy interest."

The trader said the issue was trading in a $24.70 to $24.80 context all day.

The Boston-based wealth management company intends to use the proceeds from the new issue to fund a repurchase of series B noncumulative perpetual contingent convertible preferred stock held by an investment fund managed by the Carlyle Group. A trader remarked that the preferreds had been purchased by Carlyle from the federal government, as they were issued under the Troubled Asset Relief Program.

STAG lists, MFA up next

In new listings, STAG Industrial Inc.'s $62.5 million of 6.625% series B cumulative redeemable preferreds hit the New York Stock Exchange on Wednesday.

The deal priced April 9. The ticker symbol is "STAGPB."

Paper was trading at $25.05 at midday, down 7 cents from the previous day's close. The preferreds closed at $25.06, down just 6 cents.

Meanwhile, MFA Financial Inc.'s 7.5% series B cumulative redeemable preferreds - a deal that priced April 9 - are expected to hit the NYSE on Thursday, a trader said.

He quoted the preferreds at $25.20 as of Wednesday's close.

The expected ticker symbol is "MFAPB."

Proceeds from the deal are going to be used to redeem the 8.5% series A cumulative redeemable preferreds (NYSE: MFAPA).

The New York-based real estate investment trust officially announced the call on Tuesday. The issue was trading at $25.25 on Wednesday, down a nickel.

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