Midday Commentary: Capital One deal doing well ahead of pricing; Regency also plans new issue

By Stephanie N. Rotondo

Phoenix, Aug. 13 - The preferred stock market kicked off the week with announcements from two companies that they plan to issue new preferreds.

"It sounds like we're going to have a busy week of new issues," a trader remarked.

Capital One Financial Corp. announced plans to sell series B fixed-rate noncumulative perpetual preferred stock. A trader said the issue is being talked around 6%.

"It's doing very well," he said, seeing the issue trading at $24.95 in the gray market at midday. He said the strength of the deal was likely due to it being from a big bank and the recognizable brand.

"It's something people are familiar with," he said, adding that the paper had been trading above par earlier in the session.

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

Mclean, Va.-based Capital One will apply to list the new series of preferreds on the New York Stock Exchange under the ticker symbol "COFPP."

Proceeds will be used for general corporate purposes, including a possible redemption of some trust preferreds.

The company's 7.5% enhanced trust preferreds (NYSE: COFPB) were down 33 cents, or 1.27%, at $25.56 in the midafternoon.

Regency to price

Meanwhile, Regency Centers Corp. said it is looking to issue at least $75 million of series 7 cumulative redeemable perpetual preferred shares.

Like the Capital One deal, pricing is expected around 6%, according to a trader.

The trader pegged the preferreds at $24.65 in the midday gray market.

JPMorgan and Wells Fargo are the joint bookrunning managers. RBC Capital Markets LLC is the joint lead manager.

The company has applied to list the new series of preferreds on the NYSE under the ticket symbol "REGPG."

Proceeds will be contributed to the company's operating partnership, which will then use the funds to redeem all outstanding 6.7% series 5 preferred shares. That issue (NYSE: REGPE) was down 2 cents at $25.30.

Regency is based in Jacksonville, Fla.

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