Corporate Office prices at tight end of talk; BGC to sell $25-par notes; Qwest 'looks cheap'

By Stephanie N. Rotondo

Phoenix, June 20 - New and recent issues remained a major focus in the preferred market, a trader said Wednesday.

Corporate Office Properties Trust priced a $150 million offering of 7.375% series L cumulative perpetual preferred shares.

Meanwhile, BGC Partners Inc. announced plans to sell at least $50 million of senior notes due June 2042.

Price talk is 8.125% to 8.25%, according to a trader. Pricing is expected Wednesday or Thursday.

Qwest Corp.'s recently priced 7% senior notes due 2052 were among the day's most actively traded securities, according to one market source. Though trading well above par, a trader commented that the issue looked cheap when compared to other Qwest issues.

Overall, it was a "mostly green market" for preferreds, according to a market source.

"It's not up by a lot though, on average," he added.

In terms of volume, things were "definitely better," the source said.

News that the Federal Reserve decided to extend "Operation Twist" could help out the preferred arena, a trader commented.

"That should make the preferred market look more attractive," he said.

Corporate Office prices deal

Corporate Office Properties Trust brought a $150 million offering of 7.375% series L cumulative perpetual preferred shares on Wednesday.

Pricing was at the low end of talk.

A trader saw the paper trading at $24.97.

The Columbia, Md.-based real estate investment trust will apply to list the preferreds on the New York Stock Exchange under the ticker symbol "OFCPL." Settlement is expected June 27.

Wells Fargo Securities LLC and Bank of America Merrill Lynch are the joint bookrunning managers. Citigroup Global Markets Inc., KeyBanc Capital Markets Inc. and Raymond James & Associates Inc. are the senior co-managers. BB&T Capital Markets, Capital One Southcoast Inc., Mitsubishi UFJ Securities (USA) Inc., PNC Capital Markets LLC and RBS Securities Inc. are the junior co-managers.

Proceeds will be contributed to the REIT's operating partnership, which will use the funds to pay down its unsecured revolving credit facility and for general corporate purposes, including potential future full or partial repurchases or redemptions of its outstanding preferreds.

BGC plans $25-par notes

BGC Partners announced a plan to sell at least $50 million of senior notes due June 2042.

Price talk is 8.125% to 8.25%, according to a trader. Pricing is expected Wednesday or Thursday.

That paper was trading at $24.62 in the gray market, a trader said.

"It's just a small deal," he said, noting that investors will likely wait until the issue lists to push it higher.

"We know that this is the top of the market now," one market source quipped, "when a broker's broker is coming into the market for $50 million."

The company has applied to list the notes on the NYSE under the ticker symbol "BGCA."

Wells Fargo is the bookrunning manager. Cantor Fitzgerald & Co. is the co-manager.

Proceeds will be used to repay short-term borrowings under an unsecured revolving credit facility and for general corporate purposes.

BGC is a New York-based brokerage company primarily servicing the wholesale financial and property markets.

Qwest's recent deal 'cheap'

At midday, a trader saw Qwest's $400 million issue of 7% $25-par 40-year notes trading upward, pegging the notes at $25.35.

The deal priced June 14 and has yet to list on the NYSE.

"Once it does get a reporting symbol and starts to trade more freely, we should see this move up," the trader said. "It still looks cheap" when compared to Qwest's other 7% notes due 2052 (NYSE: CTX).

Those notes were down 3 cents at $25.73. Paper had been trading as high as $25.85 during the session.

After the bell, a source said that the newest 7% issue was among the most actively traded securities, moving up a nickel to $25.28.

Qwest is a Monroe, La.-based telecommunications provider.

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