Hatteras brings $250 million 7.625% preferreds; new issues hold up; recent deals list on NYSE

By Stephanie N. Rotondo

Phoenix, Aug. 16 - Preferred stock investors were "still really active in new issues," a trader said Thursday, though he added that the secondary realm remained "stagnant."

Hatteras Financial Corp. announced and then priced an offering of series A cumulative redeemable perpetual preferred stock.

Price talk was initially 7.75%, a trader said, but was revised to 7.625%. The $250 million came at the revised talk.

Several recent deals listed on the New York Stock Exchange, including Taubman Centers Corp.'s $175 million of 6.5% series J cumulative redeemable preferreds.

Kimco Realty Corp. said it will redeem all of its 7.75% series G cumulative redeemable preferreds on Oct. 10. The issue traded actively and higher on the news.

Hatteras prices preferreds

Hatteras Financial brought $250 million of 7.625% series A cumulative redeemable perpetual preferreds on Thursday.

Price talk was originally around 7.75% but was later downwardly revised.

"So it must be going pretty well," a trader said. "But it doesn't seem like there is much going on in it."

He saw the issue trading at $24.70 in the gray market ahead of pricing.

Wells Fargo Securities LLC, Citigroup Global Markets Inc., UBS Securities LLC and Bank of America Merrill Lynch are the joint bookrunners. RBC Capital Markets LLC, Stifel Nicolaus & Co. Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jefferies & Co., J.P. Morgan Securities LLC, BB&T Capital Markets, Keefe, Bruyette & Woods and Sterne Agee & Leach are the co-managers.

Proceeds will be used to buy short-term agency securities and for general corporate purposes, including the repayment of outstanding debt, the purchase of hedging instruments and other general purposes.

New issues hold in

In recently priced deals, Protective Life Corp.'s $150 million of 6% $25-par subordinated debentures due Sept. 1, 2042 were "holding in pretty well" at $24.95. The deal priced Wednesday.

State Street Corp.'s new 5.25% series C preferreds headed higher, moving over par, according to a trader. He placed the securities at $25.05. The deal priced Tuesday.

However, Capital One Financial Corp.'s $875 million 6% series B fixed-rate noncumulative perpetual preferreds remained steady around $24.85. The company brought the deal Monday.

Recent deals list on NYSE

Three recent deals hit the NYSE on Thursday, including Taubman Centers' 6.5% series J cumulative redeemable preferreds. The ticker is "TCOPJ." The issue closed at $24.98, down from opening levels of $25.05. The deal priced Aug. 3.

Winthrop Realty Trust's $75 million of 7.75% $25-par senior notes due 2022 listed under the symbol "WRT." The notes ended at $25.18, up from $25.02 at the open. The issue came Aug. 8.

And Kilroy Realty Corp.'s $100 million of 6.375% series H cumulative redeemable preferreds, an issue that priced Aug. 6, listed under the symbol "KRCPH." The preferreds closed down 20 cents at $24.65.

Kimco plans redemption

Kimco Realty, a New Hyde Park, N.Y.-based real estate investment trust, said Thursday it will redeem all of its 7.75% series G cumulative redeemable preferreds on Oct. 10.

On the news, the paper (NYSE: KIMPG) rose a nickel by midafternoon to trade at $25.42.

The call price is $25.457465.

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