Arch Capital upsizes new deal, tightens yield; Cherry Hill, Invesco firm; secondary strong

By Stephanie N. Rotondo

Seattle, Aug. 14 – The preferred stock primary market wasn’t wasting any time as the week started.

Arch Capital Group Ltd. announced early Monday that it was selling $150 million of series F noncumulative preferreds, the proceeds of which would be used to redeem the company’s 6.75% series C noncumulative preferreds (NYSE: ARHPrC).

After the close, the company said it had sold an upsized $200 million of the preferreds at par to yield 5.45%.

Initial price talk was 5.5% but was later revised to 5.45%.

Just ahead of pricing, a trader saw the paper quoted at $24.65 bid, $24.75 offered in the gray market.

As for the series C preferreds, they declined 8 cents to $25.32 on above-average trading volume.

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

From last week’s business, Cherry Hill Mortgage Investment Corp.’s $55 million of 8.2% series A cumulative redeemable preferreds were on the active side, trading up a dime to $24.80.

The deal priced Thursday. A temporary ticker of “CHMMP” was given to the issue on Friday after the deal freed from the syndicate.

Invesco Mortgage Capital Inc.’s $250 million of 7.5% fixed-to-floating rate series C cumulative redeemable preferred stock – a deal priced Wednesday – were meantime seen at $24.95, up 13 cents on the day.

That issue also has a temporary symbol, “IVSOP.”

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