Charles Schwab sells upsized preferreds; People’s United’s $25-par deal well received

By Stephanie N. Rotondo

Seattle, Oct. 24 – The preferred stock primary market was starting to show signs of life on Monday, as two new deals were added to the calendar.

In the $1,000-par space, Charles Schwab Corp. brought $600 million of 4.625% series E fixed-to-floating rate noncumulative preferreds.

Price talk was 4.875%, according to a market source.

The deal came upsized from $400 million.

The paper was seen at 100.25 at the close.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC and Wells Fargo Securities LLC ran the books.

Dividends will be fixed and payable semiannually through March 1, 2022. At that time, the rate will float at Libor plus 331.5 basis points and will be payable on a quarterly basis.

The preferreds become redeemable March 1, 2022 at par plus accrued dividends. The company can also redeem the issue in whole within 90 days of a regulatory capital treatment event.

The new securities will not be listed.

In the $25-par market, People’s United Financial Inc. priced a $250 million offering of 5.625% series A fixed-to-floating rate noncumulative preferreds.

A market source put price talk in the 5.875% area.

JPMorgan, Wells Fargo, Goldman Sachs and Keefe Bruyette & Woods led that deal.

Another market source said the preferreds were offered at $25.45 in the gray market, with the last trade occurring at $25.40.

The preferreds were seen at $24.95 bid in earlier trading.

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