Morning Commentary: Bank of America preferreds on tap; Energy Transfer below par

By James McCandless

San Antonio, July 17 – Bank of America Corp. emerged Tuesday with a $250 million offering of $25-par series HH non-cumulative preferred stock with an expected dividend of 5.875% to 6%, market sources said, as the market continued to see new supply.

BofA Merrill Lynch is the bookrunner for the offering. Morgan Stanley & Co. LLC, UBS Securities LLC, Wells Fargo Securities LLC and RBC Capital Markets, LLC are also in the syndicate (see related story elsewhere in this issue).

Meanwhile, Energy Transfer Partners, LP’s new $400 million issue of 7.625% series D fixed-to-floating rate cumulative redeemable perpetual preferred units, which priced Monday, was spotted trading below par on its first day on the market.

The preferreds, trading under the temporary ticker “ETPZF,” were spotted trading at $24.81 on about 3,277,000 shares in volume

Meanwhile, Bank of America’s existing 6% series GG non-cumulative preferred stock declined again in early trading amid the new issue talk.

The preferreds (NYSE: BACPrB) were down 27 cents to $25.86 on volume of about 562,000 shares.

At market close Monday, the preferreds lost 26 cents.

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.14% in early trading, extending a 0.40% decline at market close on Monday.

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