New preferreds from Customers Bancorp, Capital One; Gladstone trade; preferreds weaken

By Christine Van Dusen

Atlanta, May 11 – Customers Bancorp Inc. and Capital One Financial Corp. priced new issues of preferred stock on a rough Monday for U.S. Treasuries, which translated to a difficult day for the preferred stock market.

“Not a good day,” a market source said. “Things are largely a sea of red today. The index is down 66 basis points, which is a lot in one day. Despite that, new issues did get done.”

Indeed, Customers Bancorp priced $50 million 7% series C fixed-to-floating rate non-cumulative perpetual preferred stock, according to a company filing.

The $25-par preferreds were talked in the 7.25% area.

Morgan Stanley & Co. LLC and UBS Securities LLC were the bookrunners for the Securities and Exchange Commission-registered deal. Janney Montgomery Scott LLC was the co-manager.

And Virginia-based Capital One Financial priced 5.55% series E fixed-to-floating rate non-cumulative perpetual preferred stock with a liquidation preference of $1,000 per share, a market source said.

Barclays, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Morgan Stanley, Wells Fargo Securities LLC and Capital One Securities led the SEC-registered issue.

The proceeds from the preferreds will be used for general corporate purposes, which may include the repayment of debt, acquisitions, additions to working capital, capital expenditures and investments in subsidiaries.

Gladstone, Costamare active

In trading on Monday, recent issues from Gladstone Investment Corp. and Costamare Inc. received some attention.

Gladstone’s $35 million 6.5% series C cumulative term preferreds due 2022, which freed from the syndicate on Friday and were seen that day at $24.75 bid, par offered, traded Monday morning between $24.75 and $25.00, a trader said. At the close, the preferreds were spotted at $24.76.

Janney Montgomery Scott was the bookrunner. Co-lead managers included J.J.B. Hilliard, W.L. Lyons, LLC, Wunderlich Securities, William Blair & Co. and Ladenburg Thalmann.

And Costamare’s $100 million of 8.75% series D cumulative redeemable preferreds traded Monday morning at $24.70 bid after a previous level of $24.65 bid, $24.72 offered. By the close the preferreds moved to $24.68.

Morgan Stanley, UBS Securities, Credit Suisse Securities, JPMorgan and Stifel Nicolaus & Co. Inc. facilitated that deal.

Preferreds climb in morning

In other trading of preferreds on Monday morning, RBS Capital Funding Trust VII’s 6.08% noncumulative guaranteed trust preferred securities opened up 21 cents on Monday to $24.87.

Barclays Bank plc’s 8.125% noncumulative callable dollar preference shares, series 5 ADR, moved up 11 cents to $26.00.

And Royal Bank of Scotland’s 7.25% noncumulative dollar preference shares, series T ADR, ticked up 5 cents to trade at $25.33 early in the day.

Afternoon shows weakness

During the afternoon, JPMorgan Chase & Co.’s 6.125% depository shares non-cumulative series Y were the most active, closing down 13 cents at $24.93 on 616,000 shares traded.

Wells Fargo & Co.’s depository shares CI A preferred series Q finished the day 36 cents lower, at $2.588, on 288,000 shares traded.

Also on Monday afternoon, Wells Fargo’s 8% depository shares non-cumulative perpetual CI A preferred stock, series J, fell 22 cents to $28.60 on 142,118 shares traded.

MetLife Inc.’s 6.5% non-cumulative preferred stock, series B, dipped 2 cents to $26.08 on 142,081 shares traded.

And RBS Capital Funding Trust VII’s 6.08% noncumulative guaranteed trust preferred securities declined 22 cents to $24.65 on 133,023 shares traded.

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