Corporate Office Properties to sell new issue; NextEra officially lists; BB&T slips on call

By Stephanie N. Rotondo

Phoenix, June 19 - Preferred stock investors were focusing on the primary market on Tuesday, according to a trader.

Rumors also continued to swirl that there will be "a heavy new issue book" in the near term, the trader commented.

Corporate Office Properties Trust announced plans for a sale of series L cumulative perpetual preferred shares. A trader said talk was 7.375% to 7.5%.

Meanwhile, NextEra Energy Capital Holdings Inc.'s $325 million issue of 5.625% $25-par series H junior subordinated debentures due 2072 listed on the New York Stock Exchange, as was expected.

The secondary market had plenty to keep it busy as well. After BB&T Corp. announced a $3.1 billion redemption of trust preferreds late Monday, trading in the bank's preferred securities was reasonably active. The issues were mostly weaker on the day, but they were previously trading at a premium to the call price.

Corporate Office to price

Corporate Office Properties Trust is issuing series L cumulative perpetual preferred shares, the company said in a regulatory filing.

A trader said talk was 7.375% to 7.5%. The deal had not priced as of press time.

"It's going well," he said, seeing paper trading at $24.90 in the gray market.

Wells Fargo Securities LLC and Bank of America Merrill Lynch are the joint bookrunning managers.

The real estate investment trust will apply to list the preferred shares on the NYSE under the ticker symbol "OFCPL."

Proceeds will be contributed to the company's operating partnership, which will use the funds to pay down its unsecured revolving credit facility and for general corporate purposes.

The REIT is based in Columbia, Md.

TCF trades above par

Among recent deals, TCF Financial Corp.'s $150 million of 7.5% series A noncumulative perpetual preferreds were already trading above par at $25.17. The issue priced Monday.

"It's a small deal," a trader said.

NextEra lists on NYSE

NextEra Energy's new 5.625% $25-par series H junior subordinated debentures due 2072 listed on the NYSE Tuesday. The ticker symbol is "NEEPH."

The notes were actively trading, closing at $25.15. That compared to opening trades around $25.06.

The Juno Beach, Fla.-based energy provider priced the deal June 12.

Meanwhile, Qwest Corp.'s $400 million issue of 7% $25-par 40-year notes "has not listed yet," a trader reported. However, that wasn't stopping the notes from performing well. The deal, which priced June 14, was being quoted at $25.15 bid, $25.20 offered.

BB&T trades down on redemption

Late Monday, Winston-Salem, N.C.-based BB&T joined a growing number of banks that have been calling trust preferreds in the wake of new proposed rules released by the Federal Reserve in regards to the treatment of regulatory capital.

BB&T said that it will redeem $3.1 billion of six series of TRUPs.

Come Tuesday, most of the called issues were trading down. However, the securities were trading at a premium to the July 18 call prices, so the declines were not a big surprise.

The 8.1% enhanced trust preferreds (NYSE: BBTPC) dropped 49 cents, or 1.89%, to $25.39, while the 8.95% enhanced trust preferreds (NYSE: BBTPA) fell 55 cents, or 2.14%, to $25.20.

The 9.6% enhanced trust preferreds (NYSE: BBTPB) were the most active of the complex, declining by 63 cents, or 2.41%, to finish around $25.49.

The 5.85% series D noncumulative perpetual preferreds (NYSE: BBTPD) were the lone gainer of the day, moving up 16 cents to $25.47.

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