Northern Trust taps market; Capital One trades over par; International Ship lower

By Stephanie N. Rotondo

Seattle, Aug. 1 – The preferred stock market started the week off with a firm tone, as the Wells Fargo Hybrid and Preferred Securities index traded up 18 basis points by mid-morning. However, as the broader markets sunk, so did the preferred space, leaving the index to close up just 4 bps.

The positive feel of the market was keeping the new issue pipeline flowing.

Northern Trust Corp. launched a $500 million offering of $1,000-par fixed-to-floating rate series D noncumulative perpetual preferreds at par to yield 4.6%.

A market source said initial price talk was 4.75%, though it was later revised to 4.6%.

Late in the session, Northern Trust priced $500 million of the preferreds at par to yield 4.6%, a market source said.

Barclays, BofA Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC are running the books.

As for deals from the previous week, Capital One Financial Corp.’s $600 million of 5.2% series G noncumulative preferreds – a deal priced July 26 – pushed up to $25.09, a gain of 5 cents on the day.

Meanwhile, International Shipholding Corp. filed for bankruptcy on Monday as it failed to sell off assets quickly enough to satisfy creditors.

The company’s 9% series B cumulative redeemable preferreds (OTCBB: ISHCO) dropped $5.50, or 32.35%, to $11.50 in response to the news. The 9.5% series A cumulative redeemable preferreds (OTCBB: ISHCP) were also much weaker, falling $5.50, or 31.43%, to $12.00.

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