Preferred market in summer slowdown; State Street, JPMorgan expected to list on NYSE soon

By Stephanie N. Rotondo

Phoenix, Aug. 24 - The preferred stock market was "very, very quiet" Friday, according to a trader.

He noted that he had expected things to move up a bit, as the "bond market was up a little bit with everything going on in Europe."

By the end of the day, things had turned up "a touch," according to a market source. However, he added that "volume was down significantly from the past couple of days."

Mississippi Power Co. filed a $1.6 billion shelf registration Friday that covered preferred stock, senior notes or junior subordinated notes. A trader said that "I'd bet we see a $100-par deal next week."

With the proceeds, the company could call some of its older issues, such as the 5.25% cumulative preferreds. The trader remarked that some of the older issues have "better voting rights," so the company might choose to take those out first.

Meanwhile, State Street Corp.'s $500 million of series C preferreds and JPMorgan Chase & Co.'s $1.1 billion issue of 5.5% series O noncumulative preferreds "should be listing anytime," a trader said.

Listings expected soon

NYSE listings for State Street's new 5.25% series C noncumulative perpetual preferred stock and JPMorgan's 5.5% series O preferreds are expected "anytime," a trader said Friday.

State Street priced Aug. 14. JPMorgan came Aug. 20.

The trader noted that JPMorgan's first settlement date is Monday, so the issue could list at that time.

State Street was quoted at $24.95 bid, par offered at midday, while JPMorgan's paper was seen offered at $24.95.

At the close, JPMorgan's recent issue topped the day's most active list, a source reported. And, the paper finally hit par, rising 8 cents on the day.

The New York-based bank said Friday that it had issued another 6.3 million shares under its greenshoe, bringing total issuance to $1,257,000,000.

American Financial jumps

American Financial Group Inc.'s $125 million of 5.75% $25-par senior notes due Aug. 25, 2042 were "driven up in the last couple of trades," a market source said.

At the bell, the notes were seen up 53 cents to $25.60. However, the volume-weighted average price was $25.07.

The deal priced Tuesday.

Price talk was initially around 5.875%, according to a trader.

Bank of America Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. Joint lead manager is J.P. Morgan Securities LLC.

Senior co-managers are Barclays, PNC Capital Markets LLC and Raymond James & Associates, Inc. Co-managers are Keefe, Bruyette & Woods, Inc., Macquarie Capital (USA) Inc., Mitsubishi UFJ Securities (USA), Inc. and U.S. Bancorp Investments, Inc.

Proceeds will be used to redeem all $115 million of 7.125% senior debentures due 2034 at par plus accrued interest. Any remaining proceeds will be used for general corporate purposes.

American Financial is a Cincinnati-based holding company focused primarily on property and casualty insurance.

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