Capital One prices upsized noncumulative preferreds; REITs see active trading, end softer

By Stephanie N. Rotondo

Phoenix, June 9 – A preferred stock trader said he was expecting the new issue calendar to build up this week.

“I hear there’s going to be two to three more deals this week,” he said.

That was in addition to the offering of series C fixed-rate noncumulative perpetual preferreds announced by Capital One Financial Corp. on Monday.

The deal launched and priced by the day’s close, with $500 million of the preferreds coming at par to yield 6.25%.

The McLean, Va.-based company originally said it would sell at least $250 million of the preferreds, which were initially being talked in the 6.375% to 6.5% area.

Talk was then revised to 6.25% to 6.375%.

The trader saw a less 12-cent bid, less 5-cent offer in the early gray market. After pricing, a market source said the issue was trading around $24.90, but that it “softened after they doubled the size” to $24.83 bid, $24.87 offered.

BofA Merrill Lynch, J.P. Morgan Securities LLC, UBS Securities LLC, Wells Fargo Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunning managers.

As for the company’s other outstanding preferreds, the 6% series B noncumulative perpetual preferreds (NYSE: COFPP) finished the session up a dime at $23.99.

Overall, the Wells Fargo Hybrid and Preferred Securities index was up 10 basis points on Monday.

REITs busy, weaker

Real estate investment trusts were dominating trading during Monday trading, according to a market source.

“I think it was somebody looking to lighten up in the REIT sector,” he said.

American Realty Capital Properties Inc.’s 6.7% series F cumulative redeemable preferreds (Nasdaq: ARCPP) ended down a penny at $23.46, while Sunstone Hotel Investors Inc.’s 8% series D cumulative redeemable preferreds (NYSE: SHOPD) fell 28 cents, or 1.05%, to $26.50.

Corporate Office Properties Trust’s 7.375% series L cumulative redeemable preferreds (NYSE: OFCPL) meantime closed off 9 cents at $26.23.

But Glimcher Realty Trust’s 7.5% series H cumulative redeemable preferreds (NYSE: GRTPH) managed to hold its ground, ending unchanged at $25.45.

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