GE calls baby bonds, sends series D preferreds up; Qwest volatile; Jernigan listed on NYSE

By Abigail W. Adams

Portland, Me., Feb. 1 – General Electric Co. submitted redemption notices for two of its baby bonds after the market close Tuesday. The company’s 5% preferred stock and outstanding baby bond have been making gains since the redemption notices.

The company’s 5% preferred stock soared, gaining 1.5 points on Wednesday, due to the news. However, there is no clear connection between GE’s 5% preferred stock and the redemption of the baby bonds, a market source said.

Qwest Corp.’s baby bonds made large gains early in Thursday’s session. However, the Denver, Colo.-based communications company’s 6.875% notes due 2054, 7% notes due 2052, 6.125% notes due 2053, and 6.625% notes due 2055 were unable to hold onto those gains as the day progressed.

The securities are volatile as a result of the company’s credit, a market source said.

Jernigan Capital, Inc.’s recently priced 7% series B cumulative redeemable preferred stock is now listed on the New York Stock Exchange under the ticker “JCAPPrB.” The 7% preferreds made gains their first day on the exchange.

GE calls baby bonds

General Electric submitted redemption notices for its 4.875% notes due 2052, which trade under the ticker “GEB,” and 4.875% notes due 2053, which traded under the ticker “GEH,” after the market close Tuesday.

GE’s perpetual 5% series D fixed-to-floating rate noncumulative preferred stock gained 1.5 points on the redemption news before losing half the gain on Wednesday, a market source said.

However, there does not appear to be a rational connection between the call of the baby bonds and the rise of the 5% preferreds, a market source said.

GE’s decision to redeem GEB and GEH was largely due to the downsizing of the company’s legacy assets, which reduced their need for funding.

While the baby bonds were trading at a discount, they were still too high for a tender or repurchase, solidifying GE’s decision to redeem them, a market source said.

The notes could have been called sooner but GE waited until its fourth-quarter earnings announcement was over.

General Electric’s 4.7% notes due 2053, which trades under the symbol “GEK,” continued to make gains on Thursday after large gains on Wednesday. The 4.7% notes were up 8 cents, or 0.32%, to 24.83.

The notes gained 140 cents, or 6%, on Wednesday.

Qwest volatile

Qwest Corp.’s baby bonds made large gains early in Thursday’s session. While the notes were still up at the end of the session, they lost much of their early gains.

Qwest’s baby bonds are a volatile security because of the company’s credit, a market source said.

Qwest’s 6.875% notes due 2054, which trade under the ticker “CTV,” were up 52 cents, or 1.65%, early in Thursday’s session.

The notes lost much of their early morning gains as the session progressed, and closed Thursday at $21.59, an increase of 12 cents, or 0.56%.

Qwest’s 7% notes due 2052, which trade under the ticker “CTU,” were up 39 cents, or 1.78%, to $22.07 early in the session. The notes also lost some of their early gains and closed Thursday at $21.98, an increase of 30 cents, or 1.38%.

Qwest’s 6.125% notes due 2053, which trade under the ticker “CTY,” were up 45 cents, or 2.32%, to $19.75 early in the session. The notes closed Thursday at $19.53, an increase of 22 cents, or 1.14%.

Qwest’s 6.625% notes due 2055, which trade under the ticker “CTZ,” were up 33 cents, or 1.60%, to $21 early in the session. The notes closed Thursday at $20.87, an increase of 20 cents, or 0.97%.

Jernigan lists

Jernigan’s recently priced 7% series B preferred stock is now trading on the New York Stock Exchange.

The preferred stock was at $24.10 soon after its listing. The preferreds gained throughout Thursday’s session and closed the day at $24.35.

The Memphis, Tenn.-based real estate investment trust priced $37.5 million, or 1.5 million shares, of the $25-par perpetual 7% series B cumulative redeemable preferreds on Jan. 19.

The pricing came at the cheap end of talk for a dividend of 6.75% to 7% and smaller than the initially launched 2 million share deal size.

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