Colony NorthStar active; Carlyle’s preferred units hit Nasdaq; GSE preferreds falter

By Stephanie N. Rotondo

Seattle, Sept. 15 – As the preferred stock market looked to finish out the week strong, Colony NorthStar Inc.’s $275 million of 7.125% series J cumulative redeemable preferreds continued to be actively traded.

However, the issue was holding steady at $24.80. Almost 693,000 of the preferreds traded during the session.

The deal priced on Wednesday and freed to trade on Thursday. Its temporary ticker symbol is “CNYYP.”

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and RBC Capital Markets LLC were the joint bookrunners.

The company intends to use proceeds from the deal to redeem some or all of its 8.25% series B cumulative redeemable preferreds (NYSE: CLNSPrB) and its 8.875% series C cumulative redeemable preferreds (NYSE: CLNSPrC).

As for other recent issues, the Carlyle Group’s $400 million of 5.875% series A perpetual preferred units listed on the Nasdaq Global Select Market on Friday.

The ticker symbol is “TCGP.”

The paper closed at $25.00, off 4 cents.

The units offering priced Sept. 6, coming tighter than talk in the 6% area.

Morgan Stanley, BofA Merrill Lynch, UBS Securities, Wells Fargo Securities LLC and JPMorgan were the bookrunners.

Fannie, Freddie give back

In the world of distressed preferred stock, Fannie Mae and Freddie Mac’s paper was giving up some of the gains earned in Thursday trading during Friday’s session.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) declined 15 cents, or 2.07%, to close at $7.09. About 1.61 million shares changed hands.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were meantime down 12 cents, or 1.69%, at $6.98. About 1.37 million of those preferreds were exchanged.

The GSEs’ preferreds were faring well on Thursday, after Bloomberg posted two articles that pointed to hopes the GSEs would be allowed to rebuild their capital buffers.

The Fannie issue, for instance, was up nearly 9% in the previous session, while Freddie was up almost 12%.

One Bloomberg article posted late Wednesday said that six Democratic senators had written letters to the Federal Housing Finance Agency and the Treasury Department urging them to allow the mortgage giants to build up their coffers.

Currently, the Treasury takes a majority of both agencies’ profits each quarter. What little buffer they have is slated to go to zero at the beginning of 2018.

But the senators – Sherrod Brown of Ohio, Jack Reed of Rhode Island, Robert Menendez of New Jersey, Brian Schatz of Hawaii, Chris Van Hollen of Maryland and Catherine Cortez Masto of Nevada – expressed concerns about the current agreement, speculating about the possibility Fannie and Freddie would need more bailout funds if they see any losses.

Another Bloomberg piece published late Wednesday cited a Cowen & Co. report that opined the FHFA may allow the GSEs to maintain a small capital buffer, or possibly just change the way the dividend payments are made.

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