Morning Commentary: Capitala Finance deal talked at 6%; GasLog assigned temporary ticker

By Stephanie N. Rotondo

Seattle, May 10 – Preferred stock investors continued to eye the new issue market in early Wednesday trading.

A market source reported that Capitala Finance Corp.’s planned $50 million offering of $25-par notes due 2022 – a deal announced late Tuesday and expected to price at some point during the midweek session – was being talked at 6%.

Ladenburg Thalmann & Co. Inc., BB&T Capital Markets, Janney Montgomery Scott LLC, William Blair & Co. LLC and Wunderlich Securities Inc. are running the books.

A trader said he had not seen any gray markets for the new paper, but added “I imagine it will do pretty well.”

Proceeds from the sale will be used to redeem a portion of the company’s $113.4 million outstanding 7.125% $25-par fixed-rate notes due 2022 (NYSE: CLA).

Those notes were off 16 cents at mid-morning, trading at $25.38.

Meanwhile, GasLog Partners LP’s 8.625% series A fixed-to-floating rate cumulative redeemable preference units received a temporary ticker symbol, according to a market source.

The symbol is “GSLGF.”

The $125 million deal came late Monday.

In early dealings, a trader pegged the units in a $24.98 to $25.02 context. Another source saw the units trading as high as $25.05.

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

The distribution rate will be fixed until June 15, 2027. After that, the rate will float at Libor plus 631 basis points.

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