National Retail plans $125 million offering; ING preferreds up despite asset sale delay

By Stephanie N. Rotondo

Portland, Ore., Feb. 14 - The preferred stock market was "basically flat to mixed" on Tuesday, according to a market source.

One bright spot was a new issue announced by National Retail Properties Inc. The deal - talked at 6.625% to 6.75% - was expected to price Wednesday but was already doing fairly well in the gray market.

The secondary market, however, remained somewhat subdued and generally dominated by financial names.

ING Groep NV's preferreds were on the active side and higher during Tuesday trading. The Amsterdam-based financial institution was expecting to hear Monday whether its sale of ING Direct USA to Capital One Financial Corp. would be approved or not. However, regulators delayed a decision for the second time in a week.

National Retail to bring deal

National Retail Properties announced plans to sell at least $125 million of $25.00-par series D cumulative redeemable preferred stock.

The shares will be issued as a 1/100th of an interest in the newly designated perpetual preferreds, the company said in a press release. Price talk is 6.625% to 6.75%, the trader said.

Shortly before the bell, a trader placed the issue at $24.90 in the gray market. He said he expected the deal to price Tuesday, as there was no selling group.

Another market source said the deal was "doing well in the gray [market]," seeing it close around $24.92. He remarked that he expected the issue to come Wednesday.

The Orlando, Fla.-based real estate investment trust has applied to list the preferreds on the New York Stock Exchange under the symbol "NNNPD."

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Wells Fargo Securities LLC and RBC Capital Markets LLC are the joint bookrunners. Raymond James & Associates Inc. and Stifel, Nicolaus & Co. Inc. are the lead managers.

BB&T Capital Markets, Janney Montgomery Scott LLC and Morgan Keegan & Co. Inc. are the senior co-managers. Co-managers are Capital One Southcoast, FBR Capital Markets, Piper Jaffray & Co., PNC Capital Markets LLC and SunTrust Robinson Humphrey Inc.

Proceeds will be used for general corporate purposes, which may include redeeming outstanding preferred securities and repaying the outstanding debt under the company's credit facility.

ING rises despite sale delay

ING Groep's preferred complex was climbing higher Tuesday, even without a definitive answer on the company's sale of its U.S. operations to Capital One.

The 7.375% perpetual hybrid capital securities (NYSE: IDG) gained 19 cents to close at $23.68 and the 8.5% perpetual hybrid capital securities (NYSE: IGK) rose 18 cents to $25.69. The 6.375% perpetual hybrid capital securities (NYSE: ISF) had the biggest percentage move, gaining 22 cents, or 1.06%, to $20.91.

The Federal Reserve met Monday to discuss the $9 billion sale of the unit after delaying the meeting the previous Wednesday. The first delay was blamed on scheduling conflicts.

Late Monday, the Fed said that it had "considered the application at its meeting this afternoon and expects to issue a decision soon."

There was no word as of the close of business Tuesday.

Some have called the merger a bad idea, as it could create another "too-big-to-fail" institution. The combination of Capital One and ING's U.S. operations would result in the country's fifth-largest bank.

"I imagine if that doesn't go through, we'll see all the ING issues drop a point to point-and-a-half," a trader speculated.

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