Midday Commentary: JPMorgan to sell noncumulatives; Arbor Realty, Saul Centers announce deals

By Stephanie N. Rotondo

Phoenix, Jan. 29 - Several new issues were announced in the preferred market on Tuesday, including a $500 million offering of noncumulative perpetual preferreds from J.P. Morgan Chase & Co.

Price talk was originally around 5.5% but was revised to 5.45%.

A trader saw the issue at less 25 cents in the midday gray market.

Meanwhile, two real estate investment trusts - Arbor Realty Trust Inc. and Saul Centers Inc. - announced offerings of cumulative redeemable preferred stock. However, there were few markets to be seen as of midafternoon, according to a trader.

In recent deals, FirstMerit Corp. and First Horizon National Corp.'s latest issues were not performing all that well.

A trader said First Horizon's $100 million of 6.2% series A noncumulative perpetual preferreds - a deal that priced Thursday - "has been a dog."

He placed the shares at $24.35 bid, $24.40 offered.

FirstMerit's $200 million of 5.875% series A noncumulative perpetual preferreds - a deal that came Monday - was meantime "hovering" around $24.50.

"Both of those little deals are not doing so good," the trader said. "But that's to be expected, they're both tiny deals, and they squeezed the coupon on them."

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