Deutsche Bank prices benchmark CoCo deal; State Street launched at 6%; Sotherly deal eyed

By Stephanie N. Rotondo

Phoenix, Nov. 18 – Two new deals were added to the preferred stock calendar on Tuesday.

State Street Corp. announced a sale of series E fixed-rate noncumulative perpetual preferreds.

Initial price talk was in a 6.125% to 6.25% range.

The deal later launched at 6%.

At the end of the day, a market source quoted the issue at $24.90 bid, $24.95 offered.

While the deal was said to have priced, details were not available as of press time.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Deutsche Bank AG meantime was shopping a benchmark offering of noncumulative perpetual tier 1 notes (expected ratings: Ba3/BB/BB+).

Price talk was in the 7.5% area. After the market closed, $1.5 billion of the contingent convertible notes were sold at 100.065 to yield 7.5%.

Deutsche Bank Securities Inc. is the bookrunner.

The notes become callable April 30, 2025 and then every five years thereafter, only if fully written up and subject to regulatory approval.

One trader also noted that an expected deal from Sotherly Hotels LP – a sale of $25-par senior unsecured notes due 2019 announced last week – could price Tuesday evening, “though we probably won’t see details until tomorrow.”

He said that issue was trading around $24.75 in the gray market.

Sandler O’Neill + Partners LP is running the books.

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