Associated Banc brings $25-par noncumulative issue; KeyCorp’s $1,000-pars free to trade

By Stephanie N. Rotondo

Seattle, Sept. 7 – The preferred stock new issue calendar added another deal on Wednesday, with Associated Banc-Corp’s $100 million offering of series D noncumulative preferreds.

That deal came on the heels of two new issues on Tuesday, a $525 million sale of 5% $1,000-par fixed-to-floating rate noncumulative preferreds from KeyCorp and $135 million of 6.125% series C cumulative redeemable preferreds from Monmouth Real Estate Investment Corp.

The Associated Banc issue priced at par to yield 5.375%, tight to the 5.5% price talk.

The paper was seen at $24.80 bid in the early gray market, though a trader noted that he had yet to see an offered side.

BofA Merrill Lynch and UBS Securities LLC ran the books.

The company plans to use the proceeds to redeem its outstanding 8% series B noncumulative preferreds (NYSE: ASBPB).

That paper was up 2 cents at mid-morning, trading at $25.51, but eventually closed unchanged at $25.49.

As for the KeyCorp deal, it had freed to trade as of mid-morning, according to a trader.

The trader pegged the issue at 100.125 bid, 100.5 offered. At the close, the issue was quoted at 100.25 bid, 100.375 offered.

Morgan Stanley & Co. LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC and KeyBanc Capital Markets were the joint bookrunning managers.

Dividends will be payable on a quarterly basis. The dividend will be fixed through Sept. 15, 2026. After that, the rate will float at Libor plus 360.6 basis points.

The preferreds become redeemable on or after Sept. 15, 2026 at par plus accrued dividends or in whole within 90 days of a regulatory capital treatment event.

Proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, investments in or loans to subsidiaries, refinancing of outstanding debt or capital securities, share repurchases, dividends, funding potential acquisitions and the satisfaction of other obligations.

As for the new Monmouth issue, it freed to trade later in the day.

The preferreds were quoted at $24.98 bid, par offered at mid-morning. By the bell, a source saw the securities closing at $25.06, though he noted that the volume weighted average price was $24.9568.

RBC Capital Markets, BMO Capital Markets and JPMorgan led the deal.

A trader commented that the buzz was that another deal was slated for Thursday’s session.

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