National Retail upsizes, prices; Callon sells best-effort deal; Qwest active in trading

By Andrea Heisinger

New York, May 22 - A new issue hit Wednesday's preferred stock market from National Retail Properties, Inc. alongside a smaller offering from Callon Petroleum Co.

National Retail, the Orlando-based real estate investment trust, priced an upsized $250 million of 5.7% $25-par series E cumulative preferred stock, a market source said.

A trader said at midday that talk was in the 5.75% area. There was a less 15 cents bid on the preferreds, he added.

Callon Petroleum priced $78,947,000 of 10% perpetual series A cumulative preferreds in a best-efforts offering. The securities have a liquidation preference of $50.00.

A market source characterized the day as "dead out there. There's just not much happening away from the new issues."

After the close, a trader said that the "market started out on the strong side but faded by lunch time."

He quoted the market as being up 15 basis points, or about 4 cents, around noon ET, before erasing those gains by the close, ending down 4 cents.

The drop was largely due to Treasury markets and equities losing ground in the afternoon.

"Volume was on the light side," the trader added about preferred stocks.

In trading of recent preferred offerings, the new 8% series A cumulative redeemable shares from Ladenburg Thalmann Financial Services Inc. were seen trading early Wednesday.

A trader quoted the issue at $24.73 to $24.70. The preferreds were priced at par of $25.00 on Tuesday.

Bank of America Corp.'s $1 billion issue of 5.2% series U preferreds that sold at par of $1,000 were seen "trading a premium" on Tuesday, a trader said.

By early Wednesday, they were quoted at "par and a quarter to par and three-eighths," the trader said.

Qwest Corp.'s recent 6.125% issue of $25-par preferreds due 2053 was quoted at $24.95 to par at midday.

The integrated communications company - a unit of Monroe, La.-based CenturyLink, Inc. - sold $750 million of the preferreds on May 14.

Qwest's bond was among the most actively traded of the day.

National Retail prices

National Retail Properties sold $250 million of 5.7% $25-par perpetual series E cumulative preferred stock, a market source said.

Shares will be sold at 1/100th interest.

Price guidance was in the 5.75% area, the market source said at midday. The size was increased from $100 million.

Active bookrunners were BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC. Raymond James & Associates was a passive bookrunner.

The company plans to list the preferreds on the New York Stock Exchange under the ticker "NNPRE" within 30 days.

Proceeds will be used for general corporate purposes, including funding future property acquisitions.

Callon's best efforts

Callon Petroleum sold $78,947,000, or 1,578,948 shares, of 10% perpetual series A cumulative preferred stock, according to an FWP filing with the Securities and Exchange Commission.

The preferreds have a liquidation preference of $50.00 and a public offering price of $47.50.

The securities were sold on a best-efforts basis, according to the filing.

Interest will be payable quarterly beginning June 30, 2013 and on the last day of each calendar quarter.

Bookrunners were Janney Montgomery Scott LLC, Sterne, Agee & Leach, Inc. and MLV & Co. LLC.

Proceeds will be used to accelerate the timing of the company's capital budget, to further develop and evaluate its properties in the Permian Basin, for possible future acquisitions and for general corporate purposes.

The independent oil and natural gas company is based in Natchez, Miss.

Qwest leads trading

Among preferred stock issues seen actively trading, the Qwest 6.125% $25-par notes due 2053 were seen at the top just after the close Wednesday, a source said.

There were 838,000 units changing hands, ending the day off "by a lot" or about 47 cents, at $24.95, the trader said.

Coming in behind Qwest in volume was a series K 4.7% preferred from General Electric Capital Corp. There were 824,000 shares traded, ending off 4 cents at $24.85.

A 7.5% series B $25-par preferred from CYS Investments Inc. was seen trading 646,000 shares, ending up 8 cents on the day at $25.24.

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