Deutsche Bank remains under scrutiny, preferreds stabilize; National Retail taps market

By Christine Van Dusen and Stephanie N. Rotondo

Atlanta, Oct. 4 – Preferred stock market investors on Tuesday continued to eye Deutsche Bank AG as the German lender faced a U.S. fine of up to $14 billion for its handling of mortgage-backed securities.

On Friday, it was reported that Deutsche Bank was nearing a settlement that was well below the original amount proposed. But as of Monday morning, an agreement hadn't been presented to senior-level executives from either party, according to published reports.

On Tuesday morning, Deutsche Bank's 7.6% trust preferred securities (NYSE: DTK) were up 9 cents, or 0.38%, at $23.59. By day's end, the preferreds had moved higher, to $23.67.

The 8.05% TruPS (NYSE: DKT) were stronger by 15 cents, or 0.63%, at $24.16 and closed up Tuesday at $24.31. The 6.55% TruPS (NYSE: DXB) ticked up 5 cents, or 0.22%, to $22.76. The preferreds closed up at $22.83.

“People are still worried about them. For them to be up a quarter, or whatever, is a non-event, since they were dropping precipitously before,” a trader said. “They've kind of settled in where they're at.”

Investors should view this as a “stabilization,” he said. “So we'll probably see the preferreds stay in this range for a little while.”

Other banks have not suffered from a contagion effect, he said.

“There’s not much of a knock-on effort to other banks, even with politicians jawboning their positions,” he said.

National Retail prices

Meanwhile, National Retail Properties Inc. priced an upsized $300 million of 5.2% series F cumulative redeemable preferred stock on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

There is a $45 million over-allotment option.

Price talk was 5.25%, a market source reported. The company was originally expected to sell $200 million of the preferreds.

The preferreds will be issued as depositary shares representing a 1/100th interest.

Wells Fargo Securities LLC, BofA Merrill Lynch and Morgan Stanley & Co. LLC are the joint bookrunners. Citigroup Global Markets Inc., Raymond James & Associates Inc., RBC Capital Markets and Stifel Nicolaus & Co. are the senior co-managers.

Dividends will be payable on the 15th day of March, June, September and December, beginning Dec. 15. The preferreds become callable in 2021 or upon a change of control at par plus accrued dividends.

The new securities will be listed on the New York Stock Exchange under the ticker symbol “NNNPF.”

The Orlando, Fla.-based real estate investment trust will use the proceeds to repay all outstanding debt under a credit facility. Any remaining proceeds will be used to fund future property acquisitions and for general corporate purposes.

Recent issues trade

Among recent new issues in the preferred stock market, City Office REIT Inc.’s $100 million of 6.625% series A cumulative redeemable preferreds (temporary symbol: CYORP) – a deal that priced Tuesday – were quoted on Tuesday morning at $24.90, up 3 cents. But they ended the day down, at $24.84.

And AmTrust Financial Services Inc.’s $287.5 million of 6.95% series F noncumulative preferred stock (NYSE: AFSIPF), admitted to the NYSE on Thursday, rose 4 cents to $25.50 on Tuesday morning. By day's end the preferreds were seen at $25.23.

Also receiving attention on Tuesday was Southern Co.'s issue of $800 million $25-par series 2016A junior subordinated notes due 2076 that began trading on the NYSE last week with the ticker symbol “SOJB.”

BofA Merrill Lynch, Morgan Stanley, UBS Securities LLC and Wells Fargo were the joint bookrunners.

The notes were spotted Tuesday morning at $25.14, up 4 cents, then closed at $25.12.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.