Midday Commentary: Capital One prices, set to free up; Regency Centers comes, lacks luster

By Stephanie N. Rotondo

Phoenix, Aug. 14 - It is indeed looking like a busy week for new issues. New deals from Capital One Financial Corp. and Regency Centers Corp. priced, and State Street Corp. and Reinsurance Group of America Inc. announced plans for new deals.

Capital One priced its new deal late Monday, an $875 million offering of 6% series B fixed-rate noncumulative perpetual preferred stock (expected Ba1/BB+/BB). The deal came in line with talk.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. The co-managers are Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. and RBS Securities Inc.

Proceeds will be used for general corporate purposes, including a possible redemption of some trust preferreds.

A trader said the issue was expected to free from the syndicate at 1:30 p.m. ET, seeing it trading at $24.90.

Regency Centers then priced another 6% deal early Tuesday. The company said it was issuing $75 million of 6% series 7 cumulative redeemable perpetual preferred shares.

However, a trader said he had not seen any markets in that name.

JPMorgan and Wells Fargo are the joint bookrunning managers. RBC Capital Markets LLC is the joint lead manager.

Proceeds will be contributed to the company's operating partnership, which will then use the funds to redeem all outstanding 6.7% series 5 preferred shares.

State Street 'a good name'

Investors were more interested in State Street's planned sale of series C noncumulative perpetual preferred stock.

The deal could price Tuesday, according to a trader.

The trader said he had heard price talk between 5.25% and 5.375%, though he was not positive that was the actual guidance.

"The managers are still working on it," he said. He added that it "could be a good deal," noting that the credit is "a good name."

Paper was trading at $24.93 in the gray market.

"Everybody's focusing on State Street and Capital One," he remarked.

Morgan Stanley, Bank of America Merrill Lynch, Goldman Sachs, UBS and Wells Fargo are the joint bookrunning managers for the State Street deal.

Proceeds will be used to redeem all outstanding series A preferred stock from State Street Capital Trust III. The trust will then redeem all outstanding 8.25% fixed-to-floating-rate normal automatic preferred enhanced capital securities and all of its outstanding common securities.

The redemptions require approval from the Federal Reserve. If approval is not secured, the company will use proceeds for general corporate purposes.

Also, Reinsurance Group said it was offering fixed-to-floating-rate subordinated debentures due Sept. 15, 2042.

A trader said that issue was not getting much play, speculating that it was going to be a small deal.

Barclays, UBS and Wells Fargo are the joint bookrunning managers.

Proceeds will be used for general corporate purposes.

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