Primary sees small new issues from Dynex, Apollo; BB&T frees up, GE Capital holds over par

By Stephanie N. Rotondo

Phoenix, July 25 - Preferred stocks managed to regain a bit of ground Wednesday, despite being down most of the morning, a market source said.

"I'm not sure what sparked that," the source said of the late-day gains.

The primary market remained firm throughout the session. Furthermore, the new issue calendar was again churning out deals left and right.

"I think we'll just continue to see new issuance after new issuance," a trader remarked.

Dynex Capital Inc. announced a sale of $35 million series A cumulative redeemable perpetual preferred stock. Price talk is around 8.5%, according to a trader. However, traders saw few markets for the issue.

Neither were there many quotes for Apollo Commercial Real Estate Finance Inc.'s $75 million issue of 8.625% series A cumulative redeemable preferreds. The deal priced after the market closed.

In more sizable deals, BB&T Corp.'s $1 billion of 5.625% series E noncumulative perpetual preferred stock freed from the syndicate, according to a trader.

The deal priced late Tuesday.

Meanwhile, General Electric Capital Corp.'s $1.75 billion issue of 6.5% series B fixed-to-floating rate noncumulative perpetual preferreds remained at levels above par.

Among other recent new issues, Stanley Black & Decker Inc.'s 5.75% $25-par junior subordinated notes due 2052 "should list [Thursday]," a trader said.

Deals from Dynex, Apollo

Dynex Capital plans to issue at least $35 million series A cumulative redeemable perpetual preferred stock.

Price talk is around 8.5%, according to a trader.

He saw paper trading at $24.60 in the gray market at midday.

"Ouch," a market source said of the trading levels, noting that he had seen nothing in the way of markets for the paper. "It's a small deal from a company nobody's ever heard of. Just shows you how strong the market is."

The Glen Allen, Va.-based real estate investment trust will apply to list the new securities on the New York Stock Exchange under the ticker symbol DXPA.

J.P. Morgan Securities LLC, Barclays Capital Inc. and Jefferies & Co. are the joint bookrunning managers.

Apollo Commercial Real Estate Finance meantime priced $75 million of 8.625% series A cumulative redeemable perpetual preferred stock, the company said in a press release on Wednesday.

The deal came in line with talk but was upsized from $50 million.

The company will apply to list the preferreds on the New York Stock Exchange under the ticker symbol "ARIPA." Settlement is expected Aug. 1.

Citigroup Global Markets Inc. and Bank of America Merrill Lynch are the joint bookrunning managers. Joint lead managers are JPMorgan and RBC Capital Markets LLC. Barclays Capital and Stifel, Nicolaus & Co. Inc. are co-managers.

Proceeds from the sale will be used to repay amounts outstanding under the company's master repurchase facility with JPMorgan Chase Bank, NA and the balance, if any, to acquire the company's target assets, which include commercial first mortgage loans, commercial mortgage-backed securities, subordinate financings and other commercial real estate-related debt investments, and for general corporate purposes.

Apollo is a New York-based REIT.

BB&T, GE doing well

BB&T's $1 billion of 5.625% series E noncumulative perpetual preferred stock freed to trade, a trader reported Wednesday.

He saw the shares trade at $24.95 at midday. After the close, a source said the paper was trading "all over the place," finally ending at $24.88 bid, $24.93 offered.

GE Capital's 6.5% series B fixed-to-floating rate noncumulative perpetual preferreds - another deal that priced Tuesday - was quoted at 101.5 bid, 101.625 offered in midafternoon trading.

"So that did well," the trader said. The deal had freed up just after pricing Tuesday and was already trading above par. As previously reported, a market source said a combination of credit quality and how the $100-par market worked was the reason for the fair performance.

"It was trading a ton earlier," a market source said after the bell. He placed the issue around the 101.625 mark.

Black & Decker shines

Stanley Black & Decker's new 5.75% $25-par junior subordinated notes due 2052 are expected to list on the NYSE on Thursday, according to a trader.

The ticker symbol is "SWJ." The notes were pegged at $25.60 in midafternoon trading.

But the issue fell back to par by the close, a source said. However, he said the level was "somebody driving down the price at the end of the day." He said a more accurate level was $25.65.

The volume weighted average price was $25.61.

The source also noted that the preferred was the day's most actively traded issue.

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