Morning Commentary: NuStar Energy to price fixed-to-floating preferred units; Wells Fargo hits NYSE

By Stephanie N. Rotondo

Seattle, April 25 – Buzz regarding a possible new preferred stock deal from a master limited partnership proved true on Tuesday as NuStar Energy LP announced a $150 million offering of series B fixed-to-floating rate cumulative redeemable preferred units.

Price talk is in the 7.875% area, a source said.

“I expect them to do a price revision at any time now,” a trader noted, seeing the paper at $24.95 in the early gray market.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC are running the books.

Distributions will be fixed until June 15, 2022, at which point the rate will float at Libor plus a spread.

Proceeds will be used to help fund the acquisition of Navigator Energy Services LLC. The purchase price is $1,475,000,000.

As the market prepared for the deal to price, the company’s series A preferreds (NYSE: NSPrA) were losing ground, slipping 7 cents to $26.46 at mid-morning.

Meanwhile, Wells Fargo & Co.’s $600 million of 5.625% $25-par series Y class A noncumulative perpetual preferred stock began trading on the New York Stock Exchange, as was expected.

The ticker symbol is “WFCPrY.”

The preferreds were seen at $25.08 in early trading, which compared to $25.06 at the open.

The deal priced April 17.

Among other recent issues, American Homes 4 Rent’s $150 million of 5.875% series F cumulative redeemable preferreds – a deal from April 19 – were quoted at $24.67 bid, $24.82 offered.

That issue has a temporary ticker, “AMHTP,” but is slated to hit the NYSE on Wednesday.

That symbol will be “AMHPrF.”

And, Qwest Corp.’s $575 million of 6.75% $25-par notes due 2057 – a deal priced April 18 – were pegged at $24.85.

At Monday’s close, a market source saw the notes ending a par, though he said the volume weighted average price of $24.82 was more accurate.

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