Southern California Edison trust doubles preference share sale; Charles Schwab frees up

By Stephanie N. Rotondo

Seattle, March 1 – A new preferred stock issue hit the tape Tuesday, with Southern California Edison Co.’s SCE Trust V pricing a $300 million offering of 5.45% fixed-to-floating rate trust preference securities.

Price talk was in a 5.5% to 5.625% range, according to a market source.

At the close, a source pegged the issue at $25.07 bid, $25.16 offered. Another trader saw the new deal trading at $24.80 bid, par offered in the early gray market.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC ran 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 series Ds closed down $2.59, or 2.51%, at $100.59. The shares 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.

At the bell, the noncumulatives were seen at $25.18.

“Obviously it has done very well,” said a source.

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.

Also, eBay Inc.’s $750 million offering of 6% $25-par notes due Feb. 1, 2056 – a deal from Feb. 22 – traded actively, rising above par to close at $25.20. However, a source noted that the volume weighted average price of $24.83 was “probably more representative.”

Resource Capital mixed

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 a nickel to $15.15.

Its other issues, however, were softening.

The 8.625% series C fixed-to-floating rate cumulative redeemable preferred stock (NYSE: RSOPC) fell 6 cents to $15.80.

For the fourth quarter, the New York-based real estate investment trust posted adjusted net income of $13.7 million, or 43 cents per share. Net interest income improved 23.9% from the year before and 19.7% from the third quarter of 2015.

Net loss came to 43 cents per share.

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