Morning Commentary: SoCal Edison pricing new issue; Charles Schwab deal frees to trade

By Stephanie N. Rotondo

Seattle, March 1 – A new preferred stock issue hit the tape early Tuesday morning.

Southern California Edison Co.’s SCE Trust V announced a $150 million offering of fixed-to-floating rate trust preference securities with price talk in a 5.5% to 5.625% range, according to a market source.

A trader saw the new deal trading at $24.80 bid, par offered in the gray market.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC are running the books.

Proceeds will be used to redeem $125 million of 6.5% $100-par series D preference stock (OTCBB: SCEDP) and for general corporate purposes.

The Ds were trading down $1.93, or 1.87%, to $101.25 at mid-morning.

Meanwhile, the Charles Schwab Corp.’s $750 million of 5.95% series D noncumulative perpetual preferreds – a deal priced Monday – freed to trade early in the session, a trader said.

He pegged that issue at $25.20 bid, $25.22 offered.

“It did really well,” the trader commented.

The deal came upsized from $250 million and tighter than the 6% to 6.125% price talk.

BofA Merrill Lynch, Morgan Stanley, UBS Securities LLC and Wells Fargo Securities led that offering.

Away from new issues, a trader noted that Resource Capital Corp. came out with earnings after Monday’s close.

“They missed estimates by 10 cents, but revenue was off the charts,” the trader said.

In response, the company’s 8.25% series B cumulative redeemable preferreds (NYSE: RSOPB) were trading up 9 cents to $15.19. Its other issues, however, were softening.

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