Citigroup preferreds close mixed in wake of earnings; Entergy Mississippi to list Tuesday

By Stephanie N. Rotondo

Portland, Ore., April 18 - Like the rest of the financial markets, the preferred stock market was muted and weaker following news that Standard & Poor's cut the outlook on the United States' debt to negative Monday.

Additionally, holidays bookending the week resulted in many empty desks.

"A lot of people are out," said one trader.

"There were earnings today, and there's a lot of red on the board," said another trader.

Citigroup Inc. was one that put numbers out during Monday's session. The earnings were barely in line with market expectations, and the financial institution's preferreds finished the day in mixed fashion.

In the new issue market, a trader said that Entergy Mississippi Inc.'s recent new deal was expected to list on Tuesday. Another trader said the preferreds were "not doing well" in the gray market.

Citigroup mixed on earnings

A trader said Citigroup's 8.5% preferred was the name's most active issue of the day as the company released its earnings.

He saw the issue losing a penny to close at $26.38.

The series H preferreds, however, gained 41 cents to close at $27.00.

The New York-based financial services firm posted net income of $3 billion, or 10 cents per share, for the first quarter of 2011. That compared with income of $4.4 billion for the first quarter of 2010.

Revenues were also down year over year at $19.7 billion, a 22% decline. At the Citicorp subsidiary, revenues dropped 11% to $16.5 billion.

The company blamed the dip on lower revenues out of its fixed income and regional consumer banking units.

Net credit losses, however, continued to improve for the seventh straight quarter, coming in at $6.3 billion.

S&P said Citigroup's ratings were unaffected by the earnings release.

Entergy 'not doing well'

Entergy Mississippi's new $150 million issue of $25-par 6% first mortgage bonds due 2051 are expected to list on the New York Stock Exchange on Tuesday, according to market sources.

The ticker symbol is "EMZ."

One trader placed the new issue at $24.53 in Monday trading. Another said the paper was "not doing well" in the gray market, quoting it at $24.50 bid, $24.65 offered.

On Friday, the bonds were freed from the syndicate marketing the notes. As such, trading was volatile, with the bonds trading in a range between $24.60 and $25.00.

The bonds were trading around $25.00 at Friday's close.

The Jackson, Miss.-based energy producer priced the issue on April 12. The deal was upsized from $100 million.

Wells Fargo Securities LLC, Citigroup and Morgan Stanley & Co. Inc. were the joint bookrunners. Morgan Keegan & Co. Inc. and Stephens Inc. were the co-managers.

Funds from the sale will be used to help repay $480 million of 4.65% debt coming due in May and to redeem up to $75 million of the company's 6% debt due 2032.

Among other recent deals, Vornado Realty Trust's $175 million issue of 6.875% series J cumulative redeemable preferred stock closed at $24.78.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.