Bank of America prices $25-par, $1,000-par deals; Northern Trust paper lists on Nasdaq

By Stephanie N. Rotondo

Phoenix, Sept. 2 – The first trading day of the new month saw a couple new deals hitting the primary preferred stock market, both of which came from Bank of America Corp.

The Charlotte, N.C.-based bank sold $1 billion of 6.625% series W noncumulative perpetual preferreds on Tuesday. The deal was originally expected to be $250 million, talked between 6.75% and 6.875%.

“It’s trading well,” a trader said early in the session, seeing an early gray market of $24.85.

Just prior to pricing, the trader pegged the paper at $24.77 bid, $24.80 offered.

Another market source quoted the preferreds at $24.77 bid, $24.83 offered.

Additionally, the bank sold $2 billion of 6.25% $1,000-par series X fixed-to-floating rate noncumulative perpetual preferreds.

Ahead of pricing, a trader saw the issue at 101 in the gray market.

The preferreds will be fixed until Sept. 5, 2024, at which point they will float at Libor plus 370.5 basis points.

BofA Merrill Lynch is the bookrunner on both offerings. Neither deal was contingent upon the other.

Proceeds will be used for general corporate purposes.

In the bank’s older outstanding issues, the 6.204% series D noncumulative preferreds (NYSE: BACPD) dropped 16 cents to $24.94.

Overall, the preferred stock market was weaker in post-holiday trading.

The Wells Fargo Hybrid and Preferred Securities index ended off 37 bps, or “not quite 10 cents,” a market source said.

“The Treasury market was off too,” the source noted. “Probably even more [than the preferred market]. Our market probably outperformed.”

Northern Trust lists

Among deals that have already priced, Northern Trust Corp.’s $400 million of 5.85% series C noncumulative preferreds finally began trading on the Nasdaq Global Select Market on Tuesday.

The deal came July 29. The ticker symbol is “NTRSP.”

The shares ended the session at $24.49, down from opening levels of $24.72. At mid-morning, the issue had been at $24.60.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC ran the books.

Dividends are payable on the first day of January, April, July and October. The preferreds become redeemable on or after Oct. 1, 2019 at par plus accrued dividends.

The company can also redeem the issue in whole prior to that date upon a regulatory capital treatment event.

Proceeds will be used for general corporate purposes.

Northern Trust is a Chicago-based financial holding company.

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