Preferreds soft; First Republic prices $25-par deal; Customers Bancorp lists new 7% preferreds

By Stephanie N. Rotondo

Phoenix, May 19 – Preferred stocks remained under pressure in Tuesday trading.

But as in the previous session, the market pared some of its losses by the end of business.

The Wells Fargo Hybrid and Preferred Securities Index closed off 3 basis points. It was lower by 16 bps at mid-morning.

Despite the day’s weak start, First Republic Bank brought a $100 million offering of 5.7% series F noncumulative perpetual preferreds.

A trader said he was hearing price talk around 5.75%, though he noted that it was not confirmed.

He saw an early gray market quote of $24.70 bid, $24.92 offered. Post-pricing, he pegged the issue at $24.88 bid, $24.94 offered.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are running the deal.

On the heels of the new issue, the bank’s older preferreds were trading mixed.

The 5.5% series D noncumulative perpetual preferreds (NYSE: FRCPD) were unchanged at $24.43, but the series A (NYSE: FRCPA) ended up 2 cents at $26.01.

Meanwhile, Customers Bancorp Inc.’s $50 million of 7% series C fixed-to-floating rate noncumulative perpetual preferred stock listed on the New York Stock Exchange on Tuesday, according to a market source.

The deal came May 11. The ticker symbol is “CUBIPC.”

The preferreds finished up at $25.51 and were trading at $25.35 at mid-morning, up from opening levels of $25.33.

The preferreds hit an intraday high of $25.59.

Morgan Stanley and UBS Securities LLC were the bookrunners for the Securities and Exchange Commission-registered deal.

Rumors were going around about a couple other deals that might hit the calendar, including a $1,000-par hybrid deal from a bank.

However, a trader said he had yet to see any details that would confirm the chatter.

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