Preferreds from IberiaBank, Huntington in focus; Hercules drops; Freddie, Fannie improve

By Christine Van Dusen

Atlanta, May 4 – Investors were keeping an eye on recent new issues from IberiaBank Corp. and Huntington Bancshares Inc. on Wednesday in the preferred stock market.

IberiaBank on Tuesday priced $50 million 6.6% series C fixed-to-floating rate noncumulative perpetual preferred stock via Keefe, Bruyette & Woods and BofA Merrill Lynch, following talk near 6.625%.

The preferreds will be issued as depositary shares representing a 1/400th interest.

Dividends will be fixed and payable quarterly to but excluding May 1, 2026. Beginning on that date, the dividend will float at Libor plus 492 basis points.

The preferreds become redeemable on May 1, 2026 at par plus accrued dividends. The company can also redeem the issue in whole within 90 days of a regulatory capital treatment event.

The proceeds will be used for general corporate purposes, including to fund possible acquisitions, working capital needs, investments in subsidiaries to support growth and repurchases of common stock.

The bank’s 6.625% series B fixed-to-floating rate noncumulative perpetual preferreds (Nasdaq: IBKCP) traded Wednesday morning at $25.60 after closing Tuesday at $25.64. On Wednesday the notes closed at $25.55

The new issue of preferreds from Huntington Bancshares – an additional $200 million of its 6.25% series D noncumulative perpetual preferred stock (Nasdaq: HBANO) – traded Wednesday morning at $25.98, then closed at $26.01, up 6 cents.

The Columbus, Ohio-based bank announced the offering late Monday. Huntington initially sold $350 million of the preferreds on March 14. Another $50 million of a $52.5 million greenshoe was exercised, lifting total issuance to $400 million.

Wells Fargo Securities LLC ran the books on the add-on deal. BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and the Huntington Investment Co. were joint lead managers.

Hercules add-on dips

In other news, Hercules Capital Inc. saw its $65.4 million add-on to its 6.25% $25-par notes due 2024 (NYSE: HTGX) trade Wednesday at $24.98, down a penny. At the end of the session the notes were seen at $24.97.

Prior to the add-on, there was $103 million of the notes outstanding. Including the add-on and the exercised over-allotment option, the total outstanding amount is $175.9 million.

Hercules – formerly Hercules Technology Growth Capital Inc. – is a Palo Alto, Calif.-based specialty finance company.

Freddie, Fannie move up

Freddie Mac and Fannie Mae preferreds ticked higher on Wednesday after weakening the day before on news that Freddie suffered a loss for the first quarter.

Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) traded at $3.74 on Wednesday, up 7 cents, and finished the day there. Fannie’s 8.25% series S fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FNMAS) were seen at $3.79, up 4 cents. At the end of the session the stock moved up to $3.84.

For the quarter, Freddie reported a net loss of $354 million. That compared to a profit of $524 million the year before.

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