GM Financial, EnLink price $1,000-par deals; Colony, Urstadt new issues free to trade

By Stephanie N. Rotondo

Seattle, Sept. 14 – The preferred stock primary market was starting to quiet down on Thursday following a busy week of issuance.

However, two new $1,000-par issues were priced.

General Motors Financial Co. Inc. priced $1 billion of 5.75% $1,000-par series A fixed-to-floating rate cumulative preferreds late Wednesday.

Come Thursday, the new preferreds were trending upward.

After the bell, EnLink Midstream Partners LP brought a $400 million offering of 6% $1,000-par series C fixed-to-floating rate cumulative redeemable perpetual preferred units.

The deal was upsized from $300 million. Price talk was 6.25%.

From Wednesday’s business, Colony NorthStar Inc.’s $275 million of 7.125% series J cumulative redeemable preferreds freed to trade, getting a temporary symbol of “CNYYP.”

The issue ended at $24.80, which was unchanged day over day. However, 4.66 million shares were exchanged on the day.

The deal came upsized from $100 million and in line with the 7.125% price talk.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and RBC Capital Markets LLC were the joint bookrunners.

The company intends to use proceeds from the deal to redeem some or all of its 8.25% series B cumulative redeemable preferreds (NYSE: CLNSPrB) and its 8.875% series C cumulative redeemable preferreds (NYSE: CLNSPrC).

Meanwhile, Urstadt Biddle Properties Inc.’s $100 million of 6.25% series H cumulative redeemable preferred stock was doing well, rising 22 cents to $25.10.

Over 1.12 million of the preferreds were exchanged.

Like Colony, the issue freed to trade early in the session. Its temporary ticker symbol is “URRDP.”

Price talk was 6.25% to 6.375%.

BMO Capital Markets Corp. and Wells Fargo Securities LLC ran the books.

Urstadt plans to use proceeds to redeem its 7.125% series F cumulative redeemable preferred stock (NYSE: UBPPrF).

GM Financial prices

GM Financial sold $1 billion of 5.75% $1,000-par series A fixed-to-floating rate cumulative perpetual preferred stock late Wednesday.

By the end of the day on Thursday, a market source saw the new issue at 102.80.

Earlier in the day, the preferreds were pegged at 102.625 bid, 102.75 offered.

BofA Merrill Lynch, Morgan Stanley, RBC Capital Markets and Wells Fargo ran the books.

Dividends will be fixed and payable semiannually until Sept. 30, 2027. At that point, the dividend rate will float at Libor plus 359.8 basis points and will be paid on a quarterly basis.

The preferreds become redeemable on Sept. 30, 2027 at par plus accrued dividends.

The Fort Worth, Texas-based provider of auto financing will add proceeds from the offering to its general funds, which are available to use for general corporate purposes.

EnLink deal upsized

EnLink Midstream priced a $400 million offering of 6% $1,000-par series C fixed-to-floating rate cumulative redeemable perpetual preferred units on Thursday.

The deal was upsized from $300 million. Price talk was 6.25%.

JPMorgan, Citigroup, Credit Suisse Securities (USA) LLC and Wells Fargo are the joint bookrunners.

Distributions will be payable semiannually at a fixed rate until Dec. 15, 2022. After that, the distribution rate will float at Libor plus 411 bps and will be payable on the 15th day of March, June, September and December.

The units become redeemable on or after Dec. 15, 2022 at par plus accrued distributions. Upon a rating agency event, the company can call the units at 102% of par plus accrued distributions.

The Dallas-based midstream energy services provider plans to use proceeds for capital expenditures and for general partnership purposes.

Fannie, Freddie firm

Fannie Mae and Freddie Mac’s preferreds were faring well on Thursday, after Bloomberg posted two articles that pointed to hopes the GSEs would be allowed to rebuild their capital buffers.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were up 75 cents, or 11.81%, at $7.10.

About 3.16 million of the preferreds traded.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) meantime added 58 cents, or 8.71%, to close at $7.24.

About 3.02 million of those preferreds changed hands.

One Bloomberg article posted late Wednesday said that six Deomcratic senators had written letters to the Federal Housing Finance Agency and the Treasury Department, urging them to allow the mortgage giants to build up their coffers.

Currently, the Treasury takes a majority of both agencies’ profits each quarter. What little buffer they have is slated to go to zero at the beginning of 2018.

But the senators – Sherrod Brown of Ohio, Jack Reed of Rhode Island, Robert Menendez of New Jersey, Brian Schatz of Hawaii, Chris Van Hollen of Maryland and Catherine Cortez Masto of Nevada – expressed concerns about the current agreement, speculating about the possibility Fannie and Freddie would need more bailout funds if they see any losses.

Another Bloomberg piece published late Wednesday cited a Cowen & Co. report that opined the FHFA may allow the GSEs to maintain a small capital buffer, or possibly just change the way the dividend payments are made.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.