Midday Commentary: Cullen/Frost talks new deal around 5.375%; PartnerRe's noncumulatives free up

By Stephanie N. Rotondo

Phoenix, Feb. 12 - Preferred stock traders were hearing that the new issue calendar would remain "pretty active," but there were no details on what might be on tap next.

Cullen/Frost Bankers Inc. launched an offering of series A noncumulative perpetual preferreds on Tuesday. The deal was expected to be at least $100 million, with price talk around 5.375%.

A trader noted that there was no selling group on the deal.

The trader quoted the issue at $24.73 bid, $24.85 offered in the gray market as of midday.

Pricing is expected later Tuesday.

Meanwhile, PartnerRe Ltd.'s new $250 million issue of 5.875% series F noncumulative redeemable preferreds freed from the syndicate in early trading.

The deal priced Monday, coming upsized from $100 million and revised from initial talk of 6% to 6.125%.

A trader saw a $24.98 bid for paper at midday, adding that the shares had traded up to par.

Away from the new issues, a trader said news pertaining to the preferred arena was being dominated by talk that Apple might be considering a preferred offering, given the company's large amount of cash on hand.

"They should [do it]," a trader said. But he added that the iPhone maker might instead choose to use the cash for research and development.

Still, "they could raise a lot of money," he said. "And a convertible deal would not make sense."

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