Entergy Arkansas 'doing well,' outperforms Entergy New Orleans; three deals list on NYSE

By Stephanie N. Rotondo

Phoenix, Dec. 10 - Preferred stock investors were sitting on the sidelines Monday, plagued by concerns about the fiscal cliff and talk of a high-yield bubble.

"People are still trying to figure out what they are going to do," a trader said, referring to Washington lawmakers and their ability to come to terms to avoid the fiscal cliff. Investors were also slow to do much, as they remained uncertain about how any deal might affect dividend taxes and the like.

The trader also noted chatter regarding a "high-yield bubble" was not helping the preferred market.

"The market was pretty flat," another market source said. "It was not a big-moving day."

The source also noted that he expected the new issue calendar to lighten up as the end of the year rapidly approached.

"Everything we're hearing might be postponed until the first of the year," he said.

Of the day's dealings, recent issues continued to see the bulk of the activity.

Entergy Arkansas Inc.'s new $200 million of 4.9% first mortgage bonds due 2052 - a deal that priced Thursday - were "doing well," according to a trader. The issue was also seen to be doing better than an Entergy New Orleans Inc. deal that came about a week before the Entergy Arkansas issue.

Meanwhile, several recent deals were admitted to the New York Stock Exchange on Monday, including Comcast Corp.'s $250 million of 5% $25-par senior notes due 2061.

A source remarked that the issue was among the day's most actively traded securities.

Entergy Arkansas outperforms

Entergy Arkansas' 4.9% first mortgage bonds were at $25.20 bid, $25.22 offered as of midday, according to a trader.

By the close, a source said the issue made the day's top five most actively traded issues, rising 24 cents to $25.24.

The Entergy Arkansas deal has been outperforming a similar deal done by Entergy New Orleans on Nov. 26. That company issued $30 million of 5% $25-par first mortgage bonds due 2052.

The notes (NYSE: ENJ) were holding at par.

As to the mixed performances, a source said that the New Orleans deal had received lower ratings.

"It also has to do with the quality of the underwriting," he said.

Recent deals list on NYSE

Three new issues began trading on the NYSE on Monday.

Comcast's new 5% notes listed under the ticker symbol "CCV." The issue priced Nov. 29.

Paper closed at $25.30, versus opening levels of $25.15. However, a market source called that price flat on the day, adding that the issue was among the most actively traded.

Also listed were Kennedy-Wilson Holdings Inc.'s 7.75% $25-par senior notes due 2042 and Tortoise Energy Infrastructure Corp.'s 4.375% $10-par series B mandatory redeemable preferreds.

Kennedy-Wilson's $50 million issue priced Nov. 21 and listed on the NYSE under the symbol "KWN." The issue finished at $24.97, compared to opening prices around par.

Tortoise's $80 million offering of the $10-par preferreds came Dec. 3. That issue's ticker is "TYGPB," and the securities were trading at $9.96. The preferreds had traded as high as $10.05 during the session.

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