Morning Commentary: Market softens; Capital One frees to trade; Legacy Reserves on tap

By Stephanie N. Rotondo

Phoenix, June 10 – Preferred stocks were trending downward Tuesday following in line with the straight equity markets.

The Wells Fargo Hybrid and Preferred Securities index was down 5 basis points as of mid-morning.

A trader said Capital One Financial Corp.’s new $500 million issue of 6.25% series C fixed-rate noncumulative perpetual preferreds freed from the syndicate early in the session.

The deal priced Monday, coming upsized from $250 million.

The trader said the paper was trading around par.

Meanwhile, more new issues were getting added to the week’s calendar. Legacy Reserves LP announced an offering of series B fixed-to-floating rate cumulative redeemable preferred units on Tuesday.

Price talk is 8% to 8.125%, according to the trader.

UBS Securities LLC, Morgan Stanley & Co. LLC, Stifel Nicolaus & Co. Inc. and MLV & Co. LLC are the joint bookrunning managers. Janney Montgomery Scott LLC is the senior lead manager. Co-managers include J.P. Morgan Securities LLC, Ladenburg Thalmann & Co. Inc. and Oppenheimer & Co.

The dividend will be fixed for 10 years and will then reset monthly based on Libor plus a spread.

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