Midday Commentary: Foreign issues remain under pressure; GE Capital, BB&T to bring new deals

By Stephanie N. Rotondo

Phoenix, July 24 - The preferred stock market continued to see a sell-off Tuesday. "People are still nervous about Europe," a trader said.

"Everything is down a little bit," he added, pointing specifically to European issuers such as Royal Bank of Scotland Group plc, ING Groep NV and Aegon NV.

"Those Royal Banks are down 30 to 40 cents again," he said.

The primary market, however, was holding up better than it did in the previous session.

GE Capital to price

General Electric Capital Corp. announced plans to issue series B fixed-to-floating-rate noncumulative perpetual preferred shares.

The $100-par issue was originally being talked around 6.5%, a trader said. However, that was revised to 6.25%.

"It will most likely price today," he said at midday. "It's doing very well."

He quoted the issue at 100.5 bid, 102 offered in the gray market.

The securities will not be listed on any exchange.

Barclays Capital Inc., Bank of America Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and UBS Securities LLC are the joint bookrunning managers.

Proceeds will be used for general corporate purposes.

BB&T too

BB&T Corp. also said it was planning a new issue. The bank intends to sell at least $250 million of series E noncumulative perpetual preferred stock.

A trader saw the paper trading at $24.90 in the gray market. He speculated the issue would price on Wednesday.

Price talk is 5.625% to 5.75%, according to a trader.

BB&T will apply to list the new series of preferreds on the New York Stock Exchange under the ticker symbol "BBTPE."

The joint bookrunners are Bank of America Merrill Lynch, BB&T Capital Markets, Deutsche Bank Securities Inc., Morgan Stanley, UBS and Wells Fargo Securities LLC. The co-managers are Raymond James & Associates Inc., RBC Capital Markets LLC and Stifel, Nicolaus & Co. Inc.

Proceeds will be used for general corporate purposes, which may include the acquisition of other companies, repurchasing common shares, paying down or refinancing maturing debt and extending credit or funding investments in subsidiaries.

Recent issues rising

Among recently priced issues, Stanley Black & Decker Inc.'s 5.75% $25-par junior subordinated notes due 2052 recouped their Monday losses, trading around $25.55, according to a trader.

Invesco Mortgage Capital Inc.'s 7.75% series A cumulative redeemable perpetual preferred stock meantime traded up to $24.72.

Even CommonWealth REIT's new 5.75% $25-par senior notes due Aug. 1, 2042 were heading into higher territory, trading at $24.40. That compared to closing levels of $24.10 on Monday, a trader said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.