Regions sells upsized noncumulative preferreds; BB&T's new deal frees to trade, falters

By Stephanie N. Rotondo

Phoenix, Oct. 25 - Preferred stocks ended Thursday's session slightly softer on the day.

Overall volume was less than the previous session, "but not so bad," a market source said.

Regions Financial Corp. said early in the day that it was planning an offering of series A noncumulative perpetual preferred stock, just days after the company said it was considering such issuance.

Price talk on the expected $250 million deal was originally around 6.625%, a trader said. However, pricing was then revised to 6.375% to 6.5%.

The deal priced at 6.375% and came upsized at $500 million.

Meanwhile, BB&T Corp.'s newly priced $450 million of 5.2% series F noncumulative perpetual preferred stock freed from the syndicate, according to a trader. However, paper was drifting down by the end of the day.

Regions comes upsized

Regions Financial priced a $500 million issue of 6.375% series A noncumulative perpetual preferreds on Thursday.

The deal came at the tight end of revised talk.

It's doing quite well," a trader said at midday, noting that the higher dividend was attracting investors.

"All these little banks are doing better than expected," he remarked.

The trader added that the deal had no selling group, seeing paper at $24.92 bid, $24.95 in the gray market ahead of pricing.

After pricing, a market source said the issue began to fall after the company pushed the pricing in.

He quoted the securities at $24.73 bid, $24.80 offered.

The Birmingham, Ala.-based bank will use proceeds from the offering for general corporate purposes, including a possible redemption of its 8.875% trust preferreds (NYSE: RFPZ). According to a market source, such a redemption was considered highly likely.

But if the assumption is that the call will take place at the end of November - given that companies have to provide 30 days notice - the current yield to call is minus 3.19%, according to the source.

While that was "better than it was," the source said, it didn't do much to entice investors.

The trust preferreds ended the day down 3 cents to $25.56.

BB&T frees, softens

BB&T's new 5.2% series F noncumulative perpetual preferreds freed to trade Thursday, sources reported.

The deal priced Wednesday. As of midafternoon trading on Thursday, the issue was at $24.70 bid, $24.73 offered. That was softer than Wednesday's closing levels around $24.80.

A market source noted that the issue had opened at $24.82, adding that it "went south from there."

"It's kind of a pig," he said.

The new issue wasn't doing much for the company's 5.625% series E noncumulative perpetual preferreds (NYSE: BBTPE), either. The preferreds fell 8 cents to $25.57 and was one of the day's most actively traded securities.

UMH tacks on more preferreds

UMH Properties Inc. brought a $31.25 million add-on to its 8.25% series A cumulative redeemable preferreds (NYSE: UMHPA). The shares were sold via a registered direct placement.

Paper was trading up 22 cents at $26.45.

The company originally issued $33.47 million, or 1,338,800, of the preferreds in May 2011. An additional $25 million, or 1 million shares, was sold in April of this year.

UMH is a Freehold, N.J.-based real estate investment trust that owns and operates manufactured home communities.

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