National Retail brings doubled issue of 6.625% series D preferreds; ING sale approved

By Stephanie N. Rotondo

Portland, Ore., Feb. 15 - Preferred stocks were trading more actively and modestly higher on Wednesday, according to a market source.

The primary market was focused on a new issue from National Retail Properties Inc. The deal priced early in the session, coming upsized and at the low end of price talk. Traders were enthusiastic about the deal, which was trading at levels near par in the gray market.

In secondary dealings, ING Groep NV's paper was active but mixed on the day after regulators approved the company's sale of its U.S.-based online banking operations to Capital One Financial Corp.

National Retail deal prices

National Retail Properties brought a $250 million issue of 6.625% $25-par series D cumulative redeemable preferred stock, the company said in a press release.

The dividend was at the low end of talk. The size of the deal was double what was expected.

"It had pretty good syndication," a trader said, seeing a $24.95 closing price in the gray market.

Several sources said they expected the deal to free from the syndicate on Thursday.

The shares will be issued as a 1/100th of an interest in the newly designated perpetual preferreds, the company said in the press release. Underwriters will have an over-allotment option of 1.5 million preferred shares.

Proceeds will be used for the redemption of the company's 7.375% series C cumulative redeemable preferreds (NYSE: NNNPC) and for general corporate purposes, which may include paying down debt under a credit facility.

The called preferreds traded up 2 cents to $25.50.

National Retail is an Orlando, Fla.-based real estate investment trust focused primarily in high-quality retail properties.

Looking to the calendar

A trader said he heard talk that a telecommunications company was planning a new preferred issue, possibly this week.

But another trader said he didn't expect to see anything on the calendar for the remainder of the week, given the upcoming three-day weekend.

"[An issuer] would have had to do something by today to clean it up by the weekend," he said. "So I don't think it's going to happen."

ING sale OK'd

Federal Reserve regulators gave ING Groep the go-ahead on its sale of the ING Direct USA unit to Capital One on Wednesday.

However, the Amsterdam-based institution's preferreds did not react in tandem.

The 7.375% perpetual hybrid capital securities (NYSE: IDG) and 8.5% perpetual hybrid capital securities (NYSE IGK) were the most actively traded of the ING complex. Both issues traded downward, the former falling 2 cents to $23.66 and the latter slipping 8 cents to $25.61.

But the 6.375% perpetual hybrid capital securities (NYSE: ISF) and the 7.2% perpetual debt securities (NYSE: INZ) were moderately busy and better. The 6.375% securities gained 9 cents to $20.99, while the 7.2% securities moved up 6 cents to $23.48.

Regulators had met Monday to discuss the $9 billion sale of the unit after delaying the meeting the previous Wednesday. The first delay was blamed on scheduling conflicts.

Late Monday, the Fed said that it had "considered the application at its meeting this afternoon and expects to issue a decision soon."

There was no word as of close of business Tuesday.

Some had called the merger a bad idea, as it could create another "too-big-to-fail" institution. The combination of Capital One and ING's U.S. operations would result in the country's fifth-largest bank.

But regulators disagreed with naysayers and unanimously voted late Tuesday to approve the merger.

"The board has concluded that consummation of the proposal can reasonably be expected to produce public benefits that would outweigh any likely adverse effects," said the Fed in an order released late Tuesday.

The transaction should close within the next few days.

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