Bank of America taps into $1,000-par market; Ladenburg Thalmann sells upsized preferreds

By Stephanie N. Rotondo

Phoenix, May 21 - The preferred stock new-issue market continued to be active Tuesday as Bank of America Corp. announced an issue and Ladenburg Thalmann Financial Services Inc. priced a previously announced deal.

Bank of America said it was selling $1,000-par series U fixed-to-floating rate noncumulative perpetual preferreds. A trader said price talk was around 5.25%, though he had yet to see any markets.

The issue priced at 5.2%, with $1 billion of the preferreds being sold.

Meanwhile, Ladenburg finally brought its offering of series A cumulative redeemable preferreds. The sale was first announced on May 14.

BofA sells $1,000-pars

Bank of America priced $1 billion of 5.2% series U fixed-to-floating rate noncumulative perpetual preferreds on Tuesday.

The issue begins floating on June 1, 2023 at Libor plus 313 basis points.

A market source quoted the shares at par 1/8 bid, par 3/8 offered.

The Charlotte, N.C.-based bank said it would use proceeds to redeem its 7.25% series J noncumulative perpetual preferreds, its 6.7% series 6 noncumulative perpetual preferreds and its 6.25% series 7 noncumulative perpetual preferreds.

The Js (NYSE: BACPJ) were the most actively traded of the three series, ending down 52 cents, or 2.01%, at $25.33. The series 6s (NYSE: BMLPN) declined by 28 cents, or 1.09%, to $25.47 and the 7s (NYSE: BMLPO) dropped to $25.43, off 30 cents, or 1.16%.

In other BofA issues, the 8.625% series 8 noncumulative perpetual preferreds (NYSE: BMLPQ) traded down to $24.98 in active trading.

On March 14, the preferreds were called for redemption on May 28.

Ladenburg prices

Miami-based financial services firm Ladenburg finally brought its new issue of 8% series A cumulative redeemable preferreds on Tuesday.

The deal was first announced on May 14.

The issue came in line with the 8% price talk and was upsized to $115 million from $50 million.

A trader said the paper was offered at $24.92, with trades occurring around $24.73.

The company intends to use the proceeds to pay down debt.

Recent deal tidbits

From Monday business, RenaissanceRe Holdings Ltd.'s $275 million of 5.375% $25-par series E noncumulative preference shares had yet to free up as of midday, according to a trader. He pegged the issue between $24.85 and $24.95.

And, in new listings, General Electric Capital Corp.'s $750 million of 4.7% $25-par senior notes due 2053 were admitted to the New York Stock Exchange on Tuesday.

The deal priced May 9. The ticker symbol is "GEK."

The notes were trading at $24.86 at midday, versus opening levels of $24.90. Paper closed at $24.89, which one source said was flat day over day.

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