Midday Commentary: No rest for primary market as new deals from Aflac, AG Mortgage announced

By Stephanie N. Rotondo

Phoenix, Sept. 19 - The new issue market showed no signs of slowing down at midweek. The preferred stock market learned of two more deals slated to hit the tape.

Aflac Inc. said it will issue at least $250 million of $25-par subordinated debentures due 2052.

Price talk is around 5.5%, according to a trader.

"It should do pretty well, at least hang in there pretty well," another trader said. He said that the deal won't be priced "all that cheap," which could attract institutional investors, particularly funds and indexes.

However, he also said that trading in the issue was "not that active," seeing it at $24.75 bid, $24.80 offered in the gray market.

Morgan Stanley & Co. LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Proceeds will be used for general corporate purposes.

Also, AG Mortgage Investment Trust Inc. said it will launch an issue of series B cumulative redeemable perpetual preferreds.

A trader said he heard talk is around 8% but added that he had seen few other details or markets in the name.

"Nobody's trading it," he said, speculating that the deal might just be small enough as to be tied up in retail hands.

Texas Capital frees

In recently priced deals, Texas Capital Bancshares Inc.'s $100 million of 6.5% $25-par subordinated notes due 2042 freed to trade around midday on Wednesday. The deal priced Tuesday.

A trader was surprised that the new issue was "really, really inactive."

"I barely see anything," he said. "I'm not sure why. Maybe it's a small enough deal that nobody is following it."

The trader also remarked that he likes the credit.

"They're a really clean bank," he said. "They've been performing well. They didn't get dinged that bad in the downturn."

He quoted the issue at $24.90 bid, $24.97 offered.

Meanwhile, Torchmark Corp.'s new $125 million sale of 5.875% $25-par junior subordinated debentures due 2052 was seen at $25.05 bid as of midday, according to a trader. That deal priced Monday.

Argo Group US Inc.'s $125 million of 6.5% $25-par senior notes due 2042 were trading at $24.70 in midafternoon trading.

Annaly Capital Management Inc.'s recent $400 million offering of 7.5% series D cumulative preferreds officially listed on the New York Stock Exchange, as was expected. The deal priced Sept. 6.

The ticker symbol is "NLYPD."

The preferreds were trading at $25.05, down 5 cents at midday.

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