Midday Commentary: New preferred issues take investors' focus; Pitney prices, Kennedy does not

By Stephanie N. Rotondo

Phoenix, Nov. 20 - It was "busy in the new issue market," a preferred stock trader said Tuesday.

Pitney Bowes Inc.'s newly priced offering of $100 million of 5.25% $25-par senior notes due Nov. 27, 2022 "looks fine," the trader said, seeing a $24.75 bid for paper at midday.

However, there continued to be no markets for Kennedy-Wilson Holdings Inc.'s proposed $75 million of $25-par senior notes due Dec. 1, 2042, which is being talked around 7.25%.

"The pot is still open," a trader said of the deal that was announced alongside Pitney's on Monday. "I think they're trying to move whatever they can."

The trader noted that the name was not well known, which was keeping investors at bay.

"It leads the manager to say 'come one, come all'," he said. "If you want shares, you're going to the manager; you're not going to buy them in the gray."

In recent deals, Taylor Capital Group Inc.'s $100 million of 8% series A noncumulative perpetual preferred stock seemed to be doing better, with a trader quoting the issue at $24.95 bid, par offered.

With an 8% coupon, "if you know the bank, it' pretty enticing," a trader said. Investors that know that name and like it are "not afraid of a small, non-rated retail bank."

The deal priced Thursday.

And, First Republic Bank's $150 million of 5.625% series C noncumulative perpetual preferreds were "catching a bid now," a trader said, placing the issue at $24.60 bid.

It had been trading around $24.55 previously, he noted.

Still, the trader was not waxing poetic about the deal that came Thursday.

"I like the name, but I wasn't a big fan of the pricing on that," he said, calling it aggressive.

© 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.