BofA taps market for $1.5 billion; Capitala sells baby bonds; Commerce Bancshares prices

By Stephanie N. Rotondo

Phoenix, June 12 – The primary preferred stock market continued to be busy come Thursday.

Bank of America Corp. sold a $1.5 billion offering of 5.125% $1,000-par series V fixed-to-floating rate noncumulative perpetual preferreds late in the day.

BofA Merrill Lynch is the bookrunner. Goldman Sachs & Co. served as a qualified independent underwriter.

The dividend will be fixed until June 17, 2019, at which time it will reset to Libor plus 338.7 basis points. While fixed, and when declared, dividends will be paid semiannually. Once floating, the dividend will be paid quarterly.

Capitala Finance Corp. priced $100 million of 7.125% $25-par notes due 2021, the company said in a press release issued early in the session.

The deal was announced on Wednesday, with price talk in a 7.125% to 7.25% range.

The offering was initially expected to be in the $50 million area, though a trader had speculated that the issue would grow.

A trader said he wasn’t seeing any offers for the notes as of mid-morning.

“I think it went really well,” he said. “So there’s really no stock to be had.”

Deutsche Bank Securities Inc., Keefe Bruyette & Woods and BB&T Capital Markets were the joint bookrunners. Janney Montgomery Scott LLC, Oppenheimer & Co., William Blair and Wunderlich Securities Inc. were the lead managers.

Meanwhile, Commerce Bancshares Inc. launched – and priced – an offering of series B noncumulative perpetual preferreds.

The company sold $150 million of the preferreds at par to yield 6%.

A trader had previously said the deal was being talked in the 6.125% area.

“It’s pretty tight,” he said, noting that he had not seen any gray markets for the paper.

“They are probably doing it mostly themselves, with no real selling group,” he said.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners.

Late Wednesday, Colony Financial Inc. said it was planning a sale of series B cumulative redeemable perpetual preferred stock.

A trader said there was a less 40-cents bid in the gray market.

No details regarding pricing had emerged as of 6 p.m. ET.

BofA Merrill Lynch, JPMorgan and UBS Securities LLC are the joint bookrunners. Keefe Bruyette & Woods is the co-manager.

Overall, the preferred market was faring rather well, as the Wells Fargo Hybrid and Preferred Securities index ended up 19 bps.

The index was up 12 bps at mid-morning.

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