Teekay sells upsized $125 million units offering; Colony Capital greenshoe exercised

By Stephanie N. Rotondo

Phoenix, April 13 – Preferred stocks were inching up in early Monday trading but ultimately ended the day with a weaker tone.

The Wells Fargo Hybrid and Preferred Securities index closed down 9 basis points, though it was up 3 bps at mid-morning.

The primary space saw one deal added to the calendar, as Teekay Offshore Partners LP announced a sale of series B cumulative redeemable preferred units.

Pricing came after the close, with the offering being upsized to $125 million from $75 million. The units came at par to yield 8.5%.

Initial price talk was 8.5% to 8.625%, according to a trader.

The trader saw a $24.60 bid in the gray market but speculated that it was a manager.

As for the company’s 7.25% series A cumulative redeemable preferred units (NYSE: TOOPA), those were quoted at $22.90 bid, $22.98 offered, down from levels around $23.00 on Friday, the trader said.

Those shares closed off a nickel at $22.98.

Earlier in the month, the Hamilton, Bermuda-based oil transportation company declared a distribution on the series A units of 45.31 cents. The distribution will be payable May 15.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC ran the books.

Meanwhile, Colony Capital Inc.’s $250 million issue of 7.125% series C cumulative redeemable preferreds – a deal priced late Wednesday and freed on Thursday – held steady in the first trading day of the week.

A trader pegged the issue at $24.94 bid, $24.98 offered early in the session, which was higher than Friday’s closing level of $24.90.

However, the paper maintained at that $24.90 mark.

On Monday, the company said it had fully exercised its greenshoe, lifting total issuance to $287.5 million.

JPMorgan numbers on tap

A trader said he had not heard of any other new deals hitting the pipeline this week. However, as previously reported, the calendar is expected to build up once bank earnings kick off this week.

JPMorgan Chase & Co. will get that ball rolling on Tuesday ahead of the market’s open. Analysts polled by Thomson Reuters are forecasting earnings per share of $1.38 on revenue of $24.4 billion for the first quarter.

That would compare to $1.28 per share on $23.86 billion in revenue the year before.

Ahead of the earnings, the New York-based bank’s preferreds were coming in.

The 6.125% series Y noncumulative preferreds (NYSE: JPMPF) fell 15 cents to $25.83, while the 5.5% series O noncumulative preferreds (NYSE: JPMPD) dipped a penny to par.

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