American Capital Mortgage deal comes downsized; Arbor Realty's deal admitted to NYSE

By Stephanie N. Rotondo

Phoenix, May 15 - The primary market continued to see deals coming out, as American Capital Mortgage Investment Corp. announced plans to sell at least $75 million of series A cumulative redeemable preferred stock. The deal later priced for $50 million.

Price talk was 8% to 8.125%, according to a trader. The trader noted that the non-rated deal had no selling group.

There were no reported gray markets for the paper as of mid-morning.

That lack of focus on the new deal might have resulted in the company downsizing it to $50 million. After the close, the Bethesda, Md.-based real estate investment trust released terms of the sale, which showed the preferreds coming at par to yield 8.125%.

Morgan Stanley & Co. LLC and UBS Securities LLC are the joint bookrunners. Joint lead managers are Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.

Senior co-managers include Barclays, Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC. Co-managers are Maxim Group LLC, Oppenheimer & Co., Sterne Agee & Leach Inc. and Wunderlich Securities Inc.

Meanwhile, BreitBurn Energy Partners LP's $175 million of 8.25% series A cumulative redeemable perpetual preferred units - a deal that came late Wednesday - were seen in a less 35 cent to less 30 cent context early in the day.

From last week's business, Arbor Realty Trust Inc.'s $55 million of 7.375% $25-par senior notes due May 15, 2021 listed on the New York Stock Exchange under the ticker symbol "ABRN."

A trader quoted the issue at $24.55 bid, $24.75 offered. According to NYSE, the issue was trading at $24.75.

That compared to opening levels of $24.01.

The deal came May 7.

Overall, the preferred market continued to tick higher, though it came in a bit by day's end.

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points early in the session. It closed up just 2 bps.

NorthStar active, higher

NorthStar Realty Finance Corp.'s 8.75% series E cumulative redeemable perpetual preferreds - a deal that priced Monday - dominated the day's trading, according to a market source.

The $225 million issue is trading over-the-counter under the ticker symbol "NRFTP." The deal is expected to list on the NYSE under the ticker "NRFPE."

The stock closed at $24.80 on Thursday, up 8 cents from Wednesday's close. About 1.18 million shares were exchanged.

UBS Investment Bank and Morgan Stanley were the bookrunners for the SEC-registered deal.

Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan and Keefe, Bruyette & Woods Inc. were the joint lead managers.

The proceeds will be used for general corporate purposes, including the repurchase or repayment of liabilities, as well as in connection with recently announced acquisitions.

NorthStar is a New York-based real estate investment trust.

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