Midday Commentary: U.S. Bancorp dominates early primary trading; Saratoga, Tsakos plan new deals

By Stephanie N. Rotondo

Phoenix, April 29 - The primary preferred stock market was roaring to start off the week, and an expected deal from U.S. Bancorp was leading the way.

"That's been dominating the day," a trader said of the bank's proposed offering of series H noncumulative perpetual preferreds.

Initial price talk was around 5.25% but was revised at midday to 5.15%. The trader said ahead of the revision, the preferreds were being quoted at $24.93 bid, $24.97 offered in the gray market. He noted that the expected the change would "probably bring that in at little bit."

Still, even with the downward revision, he remarked that the deal "should still do fine.

"It's one of the few investment-grade preferreds left out there," he said, especially given how many issues have been called of late. "This should be soaked up pretty quick."

Meanwhile, Saratoga Investment Corp. said it would sell up to $40.25 million of $25-par notes due May 31, 2020.

A trader said price talk was around 7.5% and that pricing was expected later this week.

"They're still in the market process," he said, speculating that the deal would come Wednesday or Thursday. He added that the deal was expected to be only $25 million.

Also, Tsakos Energy Navigation Ltd. intends to price a minimum of $50 million of series B cumulative redeemable perpetual preferreds.

That "tiny deal" was being talked around 8%, according to a trader.

The trader saw a less 30-cent offer for paper in the midday gray market.

The deal will include a dividend step-up feature. Like Saratoga, the deal was expected to price later in the week.

As for recently priced deals, Goldman Sachs Group Inc.'s 5.5% series J fixed-to-floating rate noncumulative preferreds - a $1 billion deal that priced April 18 - listed on the New York Stock Exchange on Monday.

The ticker symbol is "GSPJ." The issue was trading at $25.53 at midday, up 8 cents.

© 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.