Boston Properties kicks off primary market with upsized deal; Wells Fargo frees to trade

By Stephanie N. Rotondo

Phoenix, March 18 - The preferred stock arena saw yet another new issue hitting the market as the week began.

Boston Properties Inc. announced an offering of series B cumulative redeemable preferreds on Monday. At least $150 million shares were expected to be sold at price talk of 5.25% to 5.375%.

A trader quoted the issue in a $24.70 to $24.90 context.

The deal did price by the end of business, coming upsized at $200 million and at the tight end of talk.

A trader saw the issue closing out at $24.80 bid.

Meanwhile, Wells Fargo & Co.'s new $575 million of 5.25% series P class A noncumulative perpetual preferreds - a deal that priced on Friday - freed to trade at noon ET, a trader said.

He saw the preferreds at $24.80 bid as of midday.

In the world of U.S. banks, Citigroup Inc. and Bank of America Corp. both recently announced redemptions of trust preferreds and higher coupon securities. According to one market analysis, the total amount being called - $5.5 billion of securities from BofA and $3 billion from Citi - is equal to over 12% of total U.S. bank preferred issuance. As such, "we'll probably have quite a few deals coming, bank-wise," a trader said.

Investors continued to react to the BofA redemption, pushing the preferreds to the top of the trading list on Monday. However, there was thin activity in Citi's called issues.

BofA's 8.625% series 8 noncumulative preferreds (NYSE: BMLPQ) closed down 2 cents at $25.47. The 8.2% series H noncumulative preferreds (NYSE: BACPH) ended up a penny at $25.48.

The redemption dates for the issues are May 28 and May 1, respectively.

Away from banks, PPL Capital Funding Inc.'s $450 million of 5.9% $25-par 2013 series B junior subordinated notes due 2073 listed on the New York Stock Exchange on Monday.

The deal priced March 12. The ticker symbol is PPX.

The notes were trading at par as of midday. By the end of the day, the issue had increased 2 cents to $25.02.

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