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Morning Commentary: Banc of California sets price talk on new deal; Citizens selling $1,000-pars
By Stephanie N. Rotondo
Phoenix, March 31 – Preferred stocks were again lifting in early Tuesday trading as market players dealt with month- and quarter-end.
“We’re going to have people posturing to move things up,” a trader said.
The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points at mid-morning.
Banc of California Inc.’s planned offering of series D noncumulative perpetual preferreds received price guidance on Tuesday, according to a market source.
Price talk is 7.375% to 7.5%, the source said. Pricing is expected this week.
A trader saw a quote of $24.60 bid, $24.90 offered in Tuesday’s early gray market.
BofA Merrill Lynch and UBS Securities LLC are the join bookrunners on the nonrated deal. The Irvine, Calif.-based bank is expected to sell $50 million of the shares.
Meanwhile, Citizens Financial Group Inc. was said to be talking a deal of $1,000-par perpetual preferreds at 5.625%, a trader reported.
“That’s pretty rich,” he noted.
The preferreds will be issued via a Rule 144A offering and will be non-callable for five years.
Proceeds will be used for general corporate purposes, including the repurchase of stock from Royal Bank of Scotland Group plc.
In deals that have already priced, GasLog Ltd.’s $100 million of 8.75% series A cumulative redeemable perpetual preference shares freed to trade early in the session, according to a trader.
He saw the issue at $24.80 bid.
The deal priced Monday, coming upsized from $50 million and at talk.
UBS Securities LLC, Morgan Stanley & Co. LLC and Stifel & Co. were the joint bookrunners. Credit Suisse Securities (USA) LLC was the joint lead manager.
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