Entergy Arkansas prices $25-par, Citi announces hybrid; Comcast, Prudential trade actively

By Andrea Heisinger and Stephanie N. Rotondo

New York, Dec. 6 - Two new issues were announced Thursday morning, but otherwise the market was quiet, sources said.

Citigroup Inc. announced plans for a benchmark-size sale of fixed-to-floating rate notes while Entergy Arkansas Inc. priced an upsized $200 million of 4.9% $25-par first mortgage bonds due Dec. 1, 2052.

A source said late in the day of the Citi sale, "There's been no news since this morning, it's kind of strange."

Volume ended the day OK, a source said, after an unexciting start.

"The market's flattish, maybe up a penny after being down a penny," a trader said at midday. He also added that volume was on the light side, other than trading in issues such as the recent Comcast Corp. $25-par issue.

Hong Kong-based Seaspan Corp. priced $67.5 million of $25-par cumulative redeemable perpetual preferreds.

Meanwhile, Webster Financial Corp. saw its series E preferred list on the New York Stock Exchange.

Entergy Arkansas' offering was upsized from $100 million. Price talk on the sale was 5% to 5.125%.

At midday, a trader quoted the bonds in the gray market at $24.85 and said it's "basically all sold."

"It's a $100 million deal, so it's tiny. It will be put away today," he added.

After the close, the issue was seen trading at a bid of $24.95, with an offer at par, a trader said.

Interest will be payable on the first day of March, June, September and December, beginning March 1.

The notes become callable on or after Dec. 1, 2017 at par plus accrued interest.

Bookrunners are Wells Fargo Securities LLC, Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Stephens Inc.

Proceeds will be used by the Little Rock, Ark.-based power producer to repay borrowings from the Entergy system money pool and to repay borrowings under a $20 million credit facility with First National Bank that matures April 30 and a $150 million credit facility with Citibank NA.

Citi prices hybrids

New York City-based Citigroup issued a benchmark-size sale of series B fixed-to-floating rate noncumulative preferred stock, a source said late Thursday.

The issue had price talk in the 5.9% area, a trader said.

There were some trades in the gray market at $25.25, the trader added.

The preferreds will be issued as depositary shares representing a 1/25th interest.

When declared by the board of directors, dividends will be paid at a fixed rate on a semiannual basis through February 2023. After that, the dividends will be paid at Libor plus a spread on a quarterly basis.

The preferred stock can be redeemed on or after February 2023 at par plus accrued dividends. Additionally, the shares become callable in whole within 90 days of a regulatory capital treatment event.

Citigroup does not intend to list the preferreds on any exchange.

Citigroup Global Markets Inc. is the structuring manager and bookrunner. The lead manager is UBS Securities LLC.

Proceeds will be used for general corporate purposes, which may include funding subsidiaries, financing acquisitions or expansions and the refinancing of debt.

New issues active

Most of the trading activity for the day was around newer issues, a trader said.

The new Comcast 5% $25-pars due Dec. 15, 2061 were seen actively trading at 1.56 million shares at the session's close, up from 702,000 shares at midday. They were seen trading at $25.20 at the end of the day.

The company priced $250 million of the preferreds on Nov. 29.

The $500 million of Prudential Financial Inc. 5.75% $25-par junior subordinated notes due Dec. 15, 2052 were among the top traded issues of the day, at 1.1 million by day's end, up from 836,000 shares changing hands at midday, a trader said. They closed at $25.20. The notes were sold on Nov. 27.

Exceptions to the new sales dominating trading were Citigroup series H preferreds and an Entergy New Orleans Inc. 5% $25-par first mortgage bond due Dec. 1, 2052 that were active in late-morning trading.

"That's just people swapping them out for the new issues," a trader said.

By the close, the Citi series H shares saw 810,000 preferred shares trade, ending up 85 cents on the day.

A Wells Fargo & Co. series J preferred had 513,000 shares trade, ending off 22 cents on the day at $29.03, a trader said.

Webster lists

Webster Financial's 6.4% series E perpetual noncumulative preferred shares officially listed on the NYSE Thursday morning, a trader said.

The shares, each representing 1/1000th interest, will list under the ticker "WBS PR E."

Seaspan's preferreds

Seaspan on Thursday priced $67.5 million, or 2.7 million shares, of 7.95% $25-par series D cumulative redeemable perpetual preferred stock, according to an FWP filing with the Securities and Exchange Commission.

Dividends will be paid on the 30th day of January, April, July and October, beginning Jan. 30. The preferred stock becomes redeemable on Jan. 30, 2018 at par plus accrued dividends.

Seaspan will apply to list the securities on the New York Stock Exchange.

Jefferies & Co., Incapital LLC and Credit Suisse Securities (USA) LLC are the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include vessel acquisitions or investments.

Seaspan is a Hong Kong-based containership company.

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