Midday Commentary: Hatteras plans sale of series A cumulative preferreds; new issues in focus

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 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%.

"So it must be going pretty well," he 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.

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

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.

In other new 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 were heading higher, moving over par, according to a trader.

He placed the securities at $25.05. The deal priced Tuesday.

However, Capital One Corp.'s $875 million 6% series B fixed-rate noncumulative perpetual preferreds remained steady around $24.85.

The company brought the deal Monday.

In the secondary, Kimco Realty Corp. said it was redeeming 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 $25.41.

The call price is $25.457465.

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