Capital One upsizes preferreds, prices tighter than talk; recent deals eyed; Ally firms

By Stephanie N. Rotondo

Seattle, July 26 – The preferred stock primary market saw another deal on Tuesday, with Capital One Financial Corp.’s planned sale of at least $250 million of series G noncumulative perpetual preferreds.

The deal swelled to $600 million and came at 5.2%, “well below” initial price talk of 5.375% to 5.5%, a market source commented.

That source saw the issue trading at $24.92 bid, $24.98 offered in the gray market.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC ran the deal.

In the wake of the new deal, the company’s existing preferreds were waning.

The 6% series B noncumulative preferreds (NYSE: COFPP) dipped 7 cents to $26.13.

The McLean, Va.-based diversified financial services company plans to use the proceeds for general corporate purposes.

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 at 100.125 bid, 100.25 offered in early trading.

“It seemed to close at par,” a source said later in the day.

Away from new and recent issues, Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities (NYSE: ALLYPA) continued to be busy, though not as busy as they were on Monday.

The preferreds rose 15 cents to finish the day at $25.25.

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