Public Storage on tap; Chimera brings upsized deal; Deutsche Bank paper in focus again

By Stephanie N. Rotondo

Seattle, Oct. 6 – The preferred stock primary market was hopping on Thursday, with two new deals added to the calendar.

Public Storage announced plans to sell $100 million of series E cumulative preferreds.

Price talk was 4.9%, according to a market source.

A trader saw the issue at $24.60 bid, no offers in the early gray market, though that soon moved up to $24.80 bid.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are running the books.

The deal had not priced as of press time.

Chimera Investment Corp. also commenced a deal, a $75 million offering of series A cumulative redeemable preferreds.

Price talk on the non-rated deal was 8% to 8.125%, a source said.

The deal was later upsized to $135 million, coming at par to yield 8%.

“It’s pretty standard language for a mortgage-backed REIT, nothing goofy,” a trader said ahead of pricing.

Morgan Stanley, UBS, Keefe Bruyette & Woods Inc. and RBC Capital Markets are the bookrunners.

As for recently priced deals, Bluerock Residential Growth REIT Inc.’s $67.5 million of 7.125% series D cumulative preferred stock was seen at $24.85 bid, $24.87 offered at mid-morning.

The deal came late Wednesday via Janney Montgomery Scott LLC, D.A. Davidson & Co. and Oppenheimer & Co. Price talk was 7%.

Eagle Point Credit Co. Inc. also priced a deal late Wednesday, though there was little activity in the new issue come Thursday.

The Greenwich, Conn.-based closed-end fund sold $30 million of 7.75% series B term preferred stock due 2026, the company said in a press release.

There is a $4.5 million over-allotment option.

The deal came upsized from $25 million. The greenshoe was also increased from $3.75 million.

Keefe Bruyette was the bookrunner.

From Tuesday’s business, National Retail Properties Inc.’s $300 million of 5.2% series F cumulative redeemable preferreds were quoted at $24.97 bid, $24.99 offered.

The deal freed to trade on Wednesday. Initial price talk was 5.25%. Wells Fargo, BofA Merrill Lynch and Morgan Stanley ran the books.

More drama for Deutsche Bank

Deutsche Bank AG once again topped trading in the secondary, as chatter was that German blue-chip companies were discussing a capital injection into the bank.

Deutsche Bank’s trust preferreds were mostly lower, though modestly so.

The 6.55% trust preferred securities (NYSE: DXB) slipped 4 cents to $23.08, while the 7.6% TruPS (NYSE: DTK) declined a nickel to $24.20.

The 8.05% TruPS (NYSE: DKT) firmed 3 cents to $24.86.

German news outlets were citing unnamed sources that said several companies were in talks to give Deutsche Bank the capital it may need to deal with its U.S. settlement regarding its role in the subprime mortgage crisis. That figure was being talked in the low, single-digit billion euro range.

The bank could need the rescue, especially as the German government is reportedly not planning any sort of bailout. And as talks with the U.S. Department of Justice are said to not be going well, there remains uncertainty about how much Deutsche Bank could be on the hook for.

The initial proposal was $14 billion, which Deutsche Bank said it would not agree to. There had been reports that an amount of $5.4 billion was on the table, but again, no formal deal has been announced.

To add to the slew of negativity surrounding the financial institution, Deutsche Bank said on Thursday that it was cutting another 1,000 jobs – in addition to the 3,000 job cuts announced in June.

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