Morning Commentary: Capital One bringing new $25-par noncumulatives; BNY Mellon over par

By Stephanie N. Rotondo

Seattle, July 26 – The preferred stock primary was lining up another deal on Tuesday, with Capital One Financial Corp.’s planned sale of at least $250 million of series G noncumulative perpetual preferreds.

Price talk on the deal was 5.375% to 5.5%, a market source reported.

“I imagine they will tighten that thing up to the 5.375% area,” a trader said, seeing an early gray market quote of $24.92 bid, $24.97 offered.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are running the deal.

In the wake of the new deal, the company’s existing preferreds were waning.

The 6.2% series F noncumulative preferreds (NYSE: COFPF) were off 16 cents at mid-morning, trading at $27.33. The 6.25% series C noncumulative preferreds (NYSE: COFPC) were down 15 cents at $27.29.

The McLean, Va.-based diversified financial services company plans to use the proceeds for general corporate purposes.

As for deals from Monday’s business, Bank of New York Mellon Corp.’s $1 billion of 4.625% $1,000-par series F fixed-to-floating rate noncumulative preferreds were seen at 100.125 bid, 100.25 offered in early trading.

That deal came via BofA, Citigroup Global Markets Inc., Morgan Stanley, UBS Securities and BNY Mellon Capital Markets LLC.

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