Fifth Third, AXIS price; Zions plans auction, Bank of New York Mellon active in trading

By Andrea Heisinger

New York, May 13 - New offerings were announced Monday morning by AXIS Capital Holdings Ltd., Fifth Third Bancorp and ING U.S., Inc., continuing the flow of supply into the preferred stock market.

Zions Bancorporation announced a sale of $1,000-par fixed-to-floating rate perpetual preferreds, to be priced via online auction.

"The market was off a little, down 20 [basis points], or about 5 cents on average," a source said after the close.

"Overall volume was light to moderate."

AXIS Capital priced $200 million of series D noncumulative perpetual preferred stock, a market source said. The preferreds sold at par of $25.00.

The size of the sale was increased from $150 million.

A trader said at midday that talk on AXIS was in the 5.75% area.

After the close, the AXIS shares were seen offered at $25.05, a trader said.

Meanwhile, Fifth Third sold an upsized $600 million of 5.1% fixed-to-floating rate perpetual noncumulative series H preferreds, a trader said.

The $1,000-par hybrids had guidance in the 5.125% to 5.25% range at midday, a trader said. The size was increased from $550 million.

A trader pegged the preferreds at an offer price of 100.325 after the close.

ING U.S. tapped the market for $750 million of 40-year fixed-to-floating rate junior subordinated notes. The sale was done privately.

A trader saw the notes offered at 101.25 after the close.

Zions Bancorp is planning an online auction of up to 250,000 shares of fixed-to-floating rate perpetual noncumulative preferreds priced at par of $1,000.

The minimum size will be 100,000 shares.

"It's been quiet today despite the couple of deals," a source said of the preferred stock market. "We've heard of a couple of things coming up, but no definite names. It's a feeding frenzy right now."

In the secondary, Bank of New York Mellon Corp.'s $500 million of 4.5% $1,000-par fixed-to-floating-rate noncumulative perpetual preferreds were seen trading at midday.

A trader pegged them at 100.25. Later in the day, another trader quoted them at the same level.

A series E preferred from the Royal Bank of Scotland was "unusually active," according to a trader, who pegged it "off 24 cents" at midday.

There were 216,000 shares seen trading. The activity could be traced to an announcement from more than a week ago that the bank would once again start paying on one of its issues, the trader said.

The new $750 million of 4.7% 40-year senior notes from General Electric Capital Corp. were seen actively trading in early afternoon.

A trader quoted the preferreds at $25.05.

In other trading, a Bank of America Corp. series Q preferred, which was recently called, was one of the day's most active issues.

Fifth Third prices

Fifth Third Bank sold an upsized $600 million of 5.1% series H perpetual fixed-to-floating rate noncumulative preferred stock, a market source said.

Price guidance was in the 5.125% to 5.25% range.

The shares (Ba1/BB+/BB) will represent 1/25th ownership interest in the preferreds.

The price per share is par of $1,000.

Dividends will be payable at a fixed rate on June 30 and Dec. 31, beginning on Dec. 31, 2013 until June 30, 2023. On and after that date, there will be a floating rate over Libor payable May 31, June 30, Sept. 30 and Dec. 31, beginning Sept. 30, 2023.

Bookrunners are Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC.

The company does not intend to list the shares on any exchange.

Proceeds will be used for general corporate purposes, possibly including the repurchase of common stock.

The financial services company is based in Cincinnati.

AXIS' $25-par preferreds

AXIS Capital Holdings priced $200 million of 5.5% series D noncumulative perpetual shares of preferred stock, a market source said.

Price guidance at midday was in the 5.75% area, a trader said.

The preferreds were sold at par of $25.00.

Dividends will be payable beginning Sept. 1, 2013 and then every March 1, June 1, Sept. 1 and Dec. 1 thereafter.

The preferreds are callable on or after June 1, 2018 at par plus accrued and unpaid dividends.

Bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC.

Proceeds will be used to redeem outstanding series A preferreds and for general corporate purposes, possibly including repurchase of common stock.

The Bermuda-based holding company for specialty reinsurance intends to list the shares on the New York Stock Exchange under the ticker "AXSprD" within 30 days of distribution.

ING's private deal

ING U.S. priced $750 million of 5.65% $1,000-par 40-year fixed-to-floating rate junior subordinated notes, according to a market source and a press release.

There will be a fixed rate of 5.65% until May 15, 2023 and a floating rate after that date at Libor plus 358 bps.

The sale was done under Rule 144A and Regulation S.

BofA Merrill Lynch, Barclays and J.P. Morgan Securities LLC were bookrunners.

The notes will be guaranteed on an unsecured, junior subordinated basis by Lion Connecticut Holdings Inc., a subsidiary of ING U.S.

Proceeds will be used for the repayment of all amounts outstanding on an existing term loan agreement under a syndicated bank facility entered into in April of 2012 and the partial payment of amounts owed to ING Verzekeringen NV, a subsidiary of ING Groep NV.

The U.S. unit of ING Groep is based in New York City.

Zions preps auction

Zions Bank is planning a sale of up to 250,000 shares of series I fixed-to-floating rate noncumulative perpetual preferred stock via an online auction, according to a 424B3 filing with the Securities and Exchange Commission.

The shares will be sold at par of $1,000.

The size will be a minimum of 100,000 shares, or $100 million, and maximum of 250,000 shares, or $250 million.

There will be a fixed rate starting on Dec. 15, 2013 and on June 15 and Dec. 15 thereafter until June 15, 2023. After that there is a floating rate of Libor plus a spread, payable on March 15, June 15, Sept. 15 and Dec. 15.

Minimum bids for the dividend will be at 5.45% up to a maximum of 5.95% with increments of 0.05%.

Bookrunners are Deutsche Bank Securities Inc., Goldman Sachs & Co., Keefe, Bruyette & Woods, Macquarie Capital and Zions Direct, Inc.

The company does not intend to list the shares on any exchange.

Proceeds will be used for general corporate purposes, including possible redemption of certain securities.

The financial holding company is based in Salt Lake City.

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