Capital One, Regency Centers to enter the preferred market; Wells Fargo deal loses ground

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. Another trader said he had heard the same thing.

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%, adding that the issue was already trading well in the gray market.

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 deal is expected to come Tuesday.

In recent deals, a trader said that investors were still interested in Wells Fargo & Co.'s recent $675 million issue that came at 5.2%. Given the low coupon and yield, he was surprised to see that people were actually buying it.

Capital One to price

"It's doing very well," a trader said of Capital One Financial's planned issue, seeing it trading at $24.95 in the gray market at midday. He said the strength of the deal was likely due to it being a recognizable brand.

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

Another trader also saw the issue at $24.95 in the gray market.

"It should price shortly," he said, though, as of press time, no details were forthcoming.

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 certain 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 plans preferred sale

Regency Centers is expected to price on Tuesday an offering of at least $75 million series 7 cumulative redeemable perpetual preferred shares. They are talked around 6%.

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

"Not a lot traded," another trader said after the bell. He saw the paper trading in a range of $24.65 to $24.80 in the 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 New York Stock Exchange under the ticket symbol "REGPG."

Proceeds will be contributed to the 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.

Wells Fargo issue drifts down

Wells Fargo's new $675 million of 5.2% class A noncumulative perpetual preferreds, series N, came in some Monday, according to a trader.

He quoted the issue at $25.02 bid, $25.07 offered.

The deal priced Thursday and freed to trade Friday.

"People are buying it," the incredulous trader said, noting the low coupon.

Price talk was originally 5.375% to 5.5%. However, it was then revised to 5.2%.

He also noted that the deal did not attract "as much institutional interest as I would have thought."

The bank is applying to list the preferreds on the NYSE under the ticker symbol "WFCPN." Settlement is expected Thursday.

Wells Fargo is the bookrunner. Bank of America Merrill Lynch, Morgan Stanley and UBS are the joint lead managers.

There was no selling group, according to a trader.

Proceeds will be used for general corporate purposes, including investments in or advances to existing or future subsidiaries, repayment of obligations that have matured and reducing outstanding commercial paper and other debt.

Wells Fargo is based in San Francisco.

Glimcher, SL Green to list

A trader said that recent new deals from Glimcher Realty Trust and SL Green Realty Corp. were expected to list on the NYSE on Tuesday.

Glimcher's $90 million of 7.5% series H cumulative redeemable perpetual preferreds, which priced Aug. 1, will list under the symbol "GRTPH."

SL Green's $200 million of series I cumulative redeemable preferreds will list under "SLGPI." That deal priced Aug. 7.

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