Capital One frees to trade; NuStar trades over par; AXIS lists; Fannie, Freddie climb up

By Stephanie N. Rotondo

Seattle, Nov. 22 – The preferred stock market was starting to wind down ahead of the Thanksgiving holiday, a trader reported on 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. By the close, the issue had ticked up to $24.88, a gain of 3 cents.

The issue came upsized from $200 million and tight to 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 12 cents to $25.12. The units had risen a nickel to $25.05 in early trading.

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.

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

At mid-morning, the preferreds were trading at $23.58, though they closed at $23.75. That compared to $23.51 at the open.

As for more established secondary issues, Fannie Mae and Freddie Mac continued to dominate trading.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 17 cents, or 2.88%, at $6.07. Nearly 650,000 of the preferreds changed hands.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) improved 9 cents, or 1.62%, to $5.65, on over 6 million shares traded.

Both issues were among the day’s biggest percentage gainers.

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