CMS Energy prices baby bonds; Legacy Reserves preferred units soar; KeyCorp stumbles

By Abigail W. Adams

Portland, Me., March 5 – The primary market was active on Monday with the pricing of a new baby bond deal. CMS Energy Corp. priced $200 million of 5.625% $25-par junior subordinated notes (Baa2/BBB-/BB+) due March 15, 2078.

CMS Energy’s baby bond offering is the first new deal of March.

Preferreds rebounded and closed Monday with gains after a slight dip into negative territory in early trading.

The Wells Fargo Hybrid & Preferred Securities Financial index and the U.S. iShares Preferred Stock ETF were both down 0.02% about one hour after the opening bell. Both market indicators rebounded as the day progressed.

The Wells Fargo Hybrid & Preferred Securities Financial index closed Monday up 0.44%. The U.S. iShares Preferred Stock ETF closed Monday up 0.40%.

Legacy Reserves LP’s series A and series B fixed-to-floating rate cumulative redeemable preferred units saw enormous gains on Monday. The preferred units, which ricocheted between losses and gains in January, have seen steady upward momentum since the release of fourth-quarter and year-end earnings reports on Feb. 23.

KeyCorp’s depositary shares representing 6.125% series E fixed-to-floating rate non-cumulative preferred stock was down in high-volume trading. The Cleveland-based regional bank announced a change-up in leadership on Monday.

CMS Energy’s baby bonds

CMS Energy priced a $200 million offering of $25-par junior subordinated notes due March 15, 2078 with a coupon of 5.625% after the market close Monday. The baby bond deal is the first new deal in the $25-par market to price in March.

BofA Merrill Lynch, RBC Capital Markets Corp. and Wells Fargo Securities LLC are the joint bookrunners for the offering.

The notes are expected to be listed for trade on the New York Stock Exchange within 30 days, according to the preliminary prospectus.

Legacy soars

Legacy Reserves’ series A and series B preferred units soared in high-volume trading on Monday. Legacy’s 8% series A fixed-to-floating rate cumulative redeemable perpetual preferred units traded up to $7.72, an increase of 85 cents or 12.37%, early in the session.

The series A preferred units’ upward momentum continued with the units closing Monday at $7.90, an increase of $1.03 or 14.99%.

The 8% series B preferred units traded up to $7.70, an increase of 85 cents or 12.41%, early in the session. The units also continued to climb throughout the session closing Monday at $7.79, an increase of 94 cents or 13.72%.

Legacy Reserves’ preferred units have ricocheted between gains and losses over the past few months.

The long-struggling units from the Midland, Texas-based limited partnership focused on the acquisition and development of oil and natural gas properties soared in January after the company announced a debt reduction plan.

They later dropped in January after Moody’s Investors Service downgraded Legacy Reserves as a result of the debt reduction plan.

However, the preference units have seen positive upward momentum since the company released its fourth-quarter and year-end earnings reports on Feb. 23.

The series A preference units traded up to $6.24 and the series B preference units jumped to $6.21 on Feb. 23.

KeyCorp active

KeyCorp’s depositary shares representing the company’s 6.125% series E preferred stocks saw losses in high-volume trading on Monday. The depositary shares closed Monday at $27.66, a decrease of 8 cents or 0.29%.

The depositary shares saw nearly 10x their average trading volume on Monday. More than 532,000 shares were in play on Monday versus the three-month average of 51,000.

KeyCorp announced on Monday that executive vice president and head of corporate responsibility Bruce Murphy will retire on July 1. Murphy will be replaced by Don Graves.

© 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.