Morning Commentary: Gladstone to tap $25-par market; Bank of America preferreds improve

By James McCandless

San Antonio, Sept. 25 – The preferred market started the day largely unchanged with the Wells Fargo Hybrid & Preferred Securities Financial index holding level.

In more primary activity, Gladstone Commercial Corp. said it plans to price a $35 million offering of $25-par cumulative redeemable preferred stock with a dividend in the 6.75% area.

Stifel, Nicolaus & Co., Inc., B. Riley FBR, Inc., D.A. Davidson & Co. and Janney Montgomery Scott LLC are the joint bookrunners.

Co-managers are Ladenburg Thalmann & Co. Inc. and Wedbush Securities Inc.

The preferreds are redeemable after five years at par. Prior to that, the preferreds are redeemable within 120 days after a change-of-control or delisting event at par.

Secondary trading was led by Allstate Corp.’s 5.1% series H fixed-rate non-cumulative perpetual preferred stock, which was flat early on.

The preferreds (NYSE: ALLPrH) were level at $26.47 on volume of about 95,000 shares.

Meanwhile, in the finance space, Bank of America Corp.’s 5% series LL non-cumulative preferred stock started the session slightly positive.

The preferreds (NYSE: BACPrN) were gaining 1 cent to $25.20 with about 68,000 shares trading.

Sector peer Deutsche Bank Contingent Capital Trust V’s 8.05% trust preferred securities were losing ground.

The preferreds (NYSE: DKT) were off 3 cents to $26.03 on volume of about 49,000 shares.

Capital One Financial Corp.’s 5% series I fixed-rate non-cumulative perpetual preferreds were also under water.

The preferreds (NYSE: COFPrI) were declining 1 cent to $24.89 with about 41,000 shares trading.

Asset manager Northern Trust Corp.’s 5.85% series C non-cumulative perpetual preferred stock also saw a negative start.

The preferreds (Nasdaq: NTRSP) were down 1 cent to $25.33 on volume of about 59,000 shares.

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