BB&T ups deal, lowers pricing; SoCal trust’s new issue frees up; Deutsche Bank active

By Stephanie N. Rotondo

Seattle, March 2 – The preferred stock new issue pipeline continued to churn on Wednesday as BB&T Corp. brought a $425 million sale of 5.625% series H noncumulative perpetual preferred stock.

Initial price talk was set in a 5.75% to 5.875% range, according to a market source. That was later revised to 5.625%.

“It should do very well,” a trader said, seeing the issue trading at $24.90 bid, par offered in the early gray market.

The deal was upsized from $150 million. Once it was increased, the markets slid back to a $24.70 bid, $24.80 offered context.

BofA Merrill Lynch, BB&T Capital Markets, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are running the books.

Proceeds will be used for general corporate purposes.

As investors jockey for the new issue, BB&T’s 5.625% series E noncumulative preferreds (NYSE: BBTPE) came in, falling 56 cents, or 2.15%, to $25.49.

Meanwhile, Southern California Edison Co.’s SCE Trust V’s $300 million of 5.45% fixed-to-floating rate trust preference securities – a deal priced Tuesday – freed to trade on Wednesday, according to a trader.

The trader quoted the new issue at $25.15 bid, $25.25 offered. Another source placed the issue at $25.50 at the close.

As for Charles Schwab Corp.’s $750 million of 5.95% series D noncumulative perpetual preferreds – a deal priced Monday and freed on Tuesday – those were seen at $25.10 bid, $25.17 offered early in the day, but closing at par.

“That’s got to be the underwriter,” a source said. “It’s one of the lowest trades of the day.”

As such, he deemed the volume-weighted average price of $25.14 more accurate.

From last week’s business, eBay Inc.’s $750 million offering of 6% $25-par notes due Feb. 1, 2056 – a deal from Feb. 22 – were pegged at $24.70 bid, $24.80 offered. W.R. Berkley Corp.’s 5.9% $25-par subordinated notes due 2056 were seen at $24.90 bid, par offered.

A trader said the latter issue had been assigned its permanent ticker symbol, “WRBPC,” but that it had yet to list on the New York Stock Exchange. He speculated that notes could hit the exchange on Thursday.

On Tuesday, W.R. Berkley said its underwriters had exercised $10 million of its $15 million greenshoe, lifting total issuance to $110 million.

That deal priced Feb. 23.

Deutsche Bank ends mixed

Deutsche Bank AG’s preferreds were actively traded Wednesday and trending toward the low side.

The 7.6% trust preferred securities (NYSE: DTK) dipped 6 cents to $24.13, as the 8.05% TruPs (NYSE: DKT) lost 9 cents, ending at $25.11.

However, the 6.55% TruPs (NYSE: DXB) rose a nickel to $22.91.

The activity in the German bank’s preferreds came as John Cryan, co-chief executive, told attendees of a financial conference in Frankfurt that the company was putting off selling or floating its Postbank unit for the time being.

In January, the bank said that it planned to deconsolidate Postbank by the end of 2017. A possible initial public offering was being considered for 2016, but given current market conditions, that is now expected to occur in 2017.

The spinoff is part of the company’s larger turnaround plan, as it deals with economic uncertainty and ongoing legal fees.

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