Bank of Montreal prices $1.25 billion; Seritage Growth sells preferreds; Vornado gains

By Cristal Cody

Tupelo, Miss., Dec. 7 – Bank of Montreal priced $1.25 billion of fixed-to-floating rate subordinated notes due Dec. 15, 2032 on Thursday.

Also in the primary market, Seritage Growth Properties sold $70 million of $25-par series A cumulative redeemable perpetual preferred shares.

Preferred stocks improved over the session.

The Wells Fargo Hybrid and Preferred Securities index rose 14 basis points.

The U.S. iShares Preferred Stock ETF closed up 21 bps.

In new issue trading, Vornado Realty Trust’s 5.25% split-rated series M cumulative redeemable perpetual preferred stock climbed a dime to head out at $24.80 on Thursday in over-the-counter trading under the temporary symbol “VNNDP.”

The company sold $300 million of the $25-par preferreds (Baa3/BBB-/BB+) on Monday.

Elsewhere, Wells Fargo & Co.’s 8% series J non-cumulative perpetual class A preferred shares (NYSE: WFCPrJ) fell 3 cents to close at $25.57 on Thursday.

The preferred stock is not expected to be called on its first optional call date, according to a market source. Wells Fargo’s 8% preferreds have a call date of Dec. 15, 2017.

Bank of Montreal prices

Bank of Montreal priced $1.25 billion of 3.803% fixed-to-floating rate subordinated notes due Dec. 15, 2032 (Baa2/BBB/A+) at par on Thursday, according to an FWP filing with the Securities and Exchange Commission.

The notes priced with a spread of Treasuries plus 145 bps, or the 10-year mid-swap rate plus 143.2 bps.

The rate on the notes will reset Dec. 15, 2027 to 143.2 bps above the five-year mid-swap rate.

BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co. and UBS Securities LLC were the bookrunners.

Proceeds will be contributed to the general funds of the bank and will qualify as Tier 2 capital.

Bank of Montreal is a Montreal-based banking and financial services provider.

Seritage Growth taps market

Seritage Growth Properties priced $70 million of $25-par 7% series A cumulative redeemable perpetual preferred stock, according to an FWP filed with the SEC.

The company sold 2.8 million shares. The deal includes an over-allotment option for 420,000 shares.

The liquidation preference is $25.00 per preferred.

Morgan Stanley & Co. LLC, UBS Securities LLC and Stifel, Nicolaus & Co. Inc. were the bookrunners.

The company plans to list the preferreds on the New York Stock Exchange under the ticker symbol “SRGPrA.”

Proceeds will be used for the company's redevelopment pipeline and general trust purposes.

Seritage is a real estate investment trust formed by Hoffman Estates, Ill.-based Sears Holdings.

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