Morning Commentary: Southern Co. tapping market for $25-par notes; recent deals trade

By Stephanie N. Rotondo

Seattle, Sept. 12 – New preferred stock issues continued to enter the marketplace on Monday, continuing the trend from the previous week.

The Southern Co. kicked off the week with a planned offering of $250 million of $25-par 60-year series 2016A junior subordinated notes.

A trader quoted that issue at $24.80 bid, $24.85 offered in the early gray market.

Price talk is 5.25% to 5.375%, according to a market source. BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are leading the books.

From last week’s business, Entergy Mississippi Inc.’s $260 million of 4.9% $25-par first mortgage bonds due 2066 were seen at $24.78 at mid-morning.

The deal priced Thursday and freed to trade on Friday.

Meanwhile, Associated Banc-Corp’s $100 million of 5.375% series D noncumulative preferreds – a deal priced Wednesday – and Monmouth Real Estate Investment Corp.’s $135 million of 6.125% series C cumulative redeemable preferreds – a deal from Tuesday – were both seen offered at par.

However, a trader said he had yet to see either issue actually trade.

“People pulled back a lot of the bids, and things are just sitting there right now,” he said.

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