American Express taps market; Gladstone prices term preferreds; Capital One lists on NYSE

By Stephanie N. Rotondo

Phoenix, Nov. 5 – As Republicans took over Congress after the midterm elections, a trader said an expected rally wasn’t being seen in the preferred stock market.

However, the common equity markets were mostly higher during the session.

The Wells Fargo Hybrid and Preferred Securities index was off 10 basis points.

“It certainly was a quiet day overall,” a market source said. “Volume was light, without a doubt.”

American Express Co. added another $1,000-par deal to the new issue calendar Wednesday. The New York-based company launched – and priced – a $750 million offering of series B fixed-to-floating rate noncumulative perpetual preferreds at 5.2%, according to a market source.

Original price guidance was around 5.25%, a trader said.

A source said there was a 100.375 bid for the paper.

When declared, dividends will be payable on a semiannual basis at a fixed rate until Nov. 15, 2019, at which time the rate will begin floating at Libor plus a spread.

The dividend will then be payable on a quarterly basis.

Citigroup Global Markets Inc., BofA Merrill Lynch, Deutsche Bank Securities Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunning managers.

Meanwhile, Gladstone Investment Corp. priced its offering of series B cumulative term preferreds, “finally,” a trader said.

The Janney Montgomery Scott LLC-led deal was originally announced on Monday.

The preferreds came at par to yield 6.75%.

The trader said he had not seen any markets for the preferreds, noting the small size.

As was expected, Capital One Financial Corp.’s $500 million of 6.7% series D fixed-rate noncumulative perpetual preferred stock began trading on the New York Stock Exchange under the ticker symbol “COFPD.”

“It’s doing well,” a trader said, pegging the issue at $25.30 early in the day.

The preferreds closed at $25.32.

The deal came Oct. 28.

Upon listing, the preferreds were the most actively traded securities among paying issues, with approximately 936,000 shares changing hands. The next most active paying security was Morgan Stanley & Co. Inc.’s 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI), with about 555,000 shares trading.

The issue finished up 6 cents at $25.34.

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