GE Capital brings deal at revised talk, fizzles; PREIT prices, frees; Gabelli to list on NYSE

By Stephanie N. Rotondo

Phoenix, Oct. 2 - A new offering of $25-par senior notes from General Electric Capital Corp. piqued investor interest on Tuesday.

A preferred stock trader said price talk on the proposed $250 million deal was revised to 4.875% to 5% from around 5% initially. The trader called the pricing "pretty aggressive" and noted that the revision "dropped the bids off a little bit."

Another market source said the deal was "basically a pig" given the low levels at which it was trading.

The deal priced after the market closed, coming massively upsized at $825 million and at the tight end of revised talk.

Meanwhile, Pennsylvania Real Estate Investment Trust priced $86.25 million of new 7.375% series B cumulative redeemable perpetual preferred stock early in the session.

The deal had already freed to trade by midafternoon, according to a trader.

GE Capital's new deal fizzles

General Electric Capital brought an $825 million offering of 4.875% $25-par senior notes due 2052 on Tuesday.

A trader saw the paper at $24.63 bid in the gray market at midday ahead of pricing.

"It's trading horribly in the gray market," another source said after the bell but ahead of pricing. He quoted the issue at $24.68 bid, $24.75 offered.

The source said that the low coupon was likely the cause of the deal's underwhelming performance.

"It's stunning," he said. But he also noted that the company, like so many other recent issuers, was looking to capitalize on current market conditions.

"Spreads and rates are at historic lows, and they are looking to take every advantage possible," he said.

GE Capital intends to use proceeds from the sale to redeem its 6.625% public income notes due 2032 (NYSE: GEA). The trader said the issue "got clobbered" on the open.

At mid-afternoon, the securities had fallen $1.38, or 5.15%, to $25.40. The trader remarked that it showed how investors should take caution when buying issues that are callable when they are already trading at a premium.

By the close, the losses had amounted to $1.51, or 5.64%, leaving the issue at $25.27.

Morgan Stanley & Co. LLC, Bank of America Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners of the new issue.

GE Capital is a Norwalk, Conn.-based finance company.

PREIT prices, frees

Pennsylvania Real Estate Investment Trust priced $86.25 million of new 7.375% series B cumulative redeemable perpetual preferred stock.

A trader said the deal freed from the syndicate around mid-morning. He pegged the preferreds at $24.90 bid, par offered.

Price talk was originally 7.5% to 7.625%, according to a trader.

The joint bookrunning managers are Wells Fargo, Citigroup Global Markets Inc. and Bank of America Merrill Lynch. The joint lead managers are J.P. Morgan Securities LLC and Stifel, Nicolaus & Co. Inc.

The co-managers are Deutsche Bank Securities Inc., Janney Montgomery Scott LLC, Mitsubishi UFJ Securities (USA) Inc., TD Securities (USA) LLC and U.S. Bancorp Investments Inc.

Proceeds will be used to repay amounts outstanding under the company's 2010 credit facility and for general corporate purposes.

PREIT is a Philadelphia-based real estate investment trust.

Gabelli, Resource to list

Gabelli Equity Trust Inc.'s recent $105 million issue of 5% series H cumulative perpetual preferred stock will list on the New York Stock Exchange on Wednesday.

The deal priced Sept. 25. The ticker symbol is "GBEEP."

A trader saw the preferreds hanging around the $25.20 level.

Also listing on Wednesday are Resource Capital Corp.'s $25 million of 8.25% series B cumulative redeemable perpetual preferreds.

That deal also priced Sept. 25. The symbol is "RSOPB."

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