American Financial sells $25-par debentures; AIG preferreds active, flat; NiSource gains

By James McCandless

San Antonio, March 11 – The preferred space saw mixed trading amid the pricing of a new issue.

American Financial Group, Inc. priced a $125 million offering of $25-par subordinated debentures due March 30, 2059 with a coupon of 5.875%.

Leading the secondary, American International Group, Inc.’s new 5.85% series A non-cumulative perpetual preferred stock was active but level.

Utilities name NiSource Inc.’s 6.5% series B fixed-rate reset cumulative redeemable perpetual preferreds improved.

Sector peer Southern California Edison, a subsidiary of Edison International, saw its 5% cumulative trust preference securities decline.

Real estate investment trust Digital Realty Trust, Inc.’s 5.85% cumulative redeemable preferred stock was on a positive track.

Elsewhere, Air Lease Corp.’s 6.15% series A fixed-to-floating rate non-cumulative perpetual preferreds moved downward.

American Financial prices

American Financial priced a $125 million offering of $25-par 40-year subordinated debentures (Baa2/BBB-) with a coupon of 5.875%.

There is no greenshoe.

The deal was announced Monday morning.

BofA Merrill Lynch and Wells Fargo Securities, LLC are the joint bookrunners. J.P. Morgan Securities LLC is the lead manager.

The debentures are callable on or after March 30, 2024 at par. Prior to that, they are callable within 90 days after a tax event or ratings agency event.

AIG active, unchanged

Leading trading in the secondary market, AIG’s new 5.85% series A non-cumulative perpetual preferred stock closed the session flat.

The preferreds, trading under the temporary symbol “AIGGZ,” closed the day level at $25.10 on volume of about 848,000 shares.

On Friday, the preferreds reached $25.10 on their first trading day.

NiSource improves

In the utilities space, NiSource’s 6.5% series B fixed-rate reset cumulative redeemable perpetual preferreds improved on Monday.

The preferreds (NYSE: NIPrB) gained 5 cents to close at $26.73 on volume of about 692,000 shares.

Elsewhere in the sector, Southern California Edison’s 5% cumulative trust preference securities were in decline.

The preferreds (NYSE: SCEPrL) dropped 11 cents to close at $20.56 on volume of about 490,000 shares.

On Monday, Fitch Ratings lowered the long-term issuer default ratings on the company and Edison International, its parent company.

Digital Realty gains

Digital Realty’s 5.85% cumulative redeemable preferred stock ended the day’s activity on a positive track.

The preferreds, trading under the temporary symbol “DLRPO,” picked up 11 cents to close at $24.83 with about 533,000 shares trading.

Air Lease down

Meanwhile, Air Lease’s 6.15% series A fixed-to-floating rate non-cumulative perpetual preferreds ended the day lower.

The preferreds (NYSE: ALPrA) were off 5 cents to close at $25.20 on volume of about 231,000 shares.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.03% at the close.

The iShares US Preferred Stock ETF was up 3 cents to $36.37.

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