Morning Commentary: Capital One’s new issue frees to trade; NuStar trades over par; AXIS lists

By Stephanie N. Rotondo

Seattle, Nov. 22 – The preferred stock market was starting to wind down ahead of the Thanksgiving holiday, a trader reported early Tuesday.

“It’s super quiet,” he said.

The trader further commented that “the only thing really going on” was Capital One Financial Corp.’s $500 million of 6% series H noncumulative preferreds, a deal which priced on Monday.

The trader noted that the paper had freed to trade early in the session, trading at $24.87 at mid-morning.

The issue came upsized from $200 million and tighter than the 6.125% price talk.

BofA Merrill Lynch, J.P. Morgan Securities LLC, UBS Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the books.

“We heard a brief rumor of a possible utility deal,” a trader noted. “But if they haven’t launched it yet, I don’t think anything else is going to happen for the rest of the week.”

NuStar Energy LP’s $200 million of 8.5% series A fixed-to-floating rate cumulative redeemable perpetual preferred units were meantime seen edging up a nickel to $25.05.

The deal came Thursday, upsized from $100 million and in line with price talk. The units begin to float on Dec. 15, 2021 at Libor plus 676.6 basis points. The issue freed to trade Friday afternoon.

The units are trading under a temporary symbol, “NTSRF.”

Wells Fargo, BofA Merrill Lynch and UBS Securities were the bookrunners.

And, as was expected, AXIS Capital Holdings Ltd.’s $550 million of 5.5% series E noncumulative preferred shares began trading on the New York Stock Exchange on Tuesday under the ticker “AXSPE.”

The deal came Oct. 31 and included a $50 million greenshoe.

The issue is trading under a temporary symbol, “AXHHF.”

BofA Merrill Lynch, Morgan Stanley, UBS Securities and Wells Fargo were the bookrunners.

At mid-morning, the units were trading at $23.58. That compared to $23.51 at the open.

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