Preferred stock primary pipeline stalls; market turns positive; Monmouth lists on NYSE

By Stephanie N. Rotondo

Seattle, Sept. 14 – The preferred stock market primary pipeline was slowed on Wednesday, with no new deals announced.

Furthermore, a trader said he was hearing that there would be no additional new issues for the remainder of the week. He did note that the buzz was that at least a couple deals were coming next week.

“I think everyone is focused on the Fed,” the trader said, referring to the Federal Reserve’s policy meeting beginning on Sept. 20.

Overall, the market started out with a weak tone. However, in the final minutes of trading, things perked up a bit.

The Wells Fargo Hybrid and Preferred Securities index finished the day up 4 basis points. It was off as much as 17 bps in earlier trading.

As for the current week’s deals, they were following along with the day’s trend.

Aspen Insurance Holdings Ltd.’s $225 million of 5.625% noncumulative perpetual preference shares were seen at $24.75 bid, $24.80 offered at mid-morning. But the paper pushed up to $24.80 bid, $24.85 offered by the bell.

The issue priced Tuesday, coming upsized from $150 million and at the tight end of talk. BofA Merrill Lynch, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC, Citigroup Global Markets Inc. and Barclays ran the books.

The Southern Co.’s $800 million of 5.25% $25-par junior subordinated notes due 2076 – a deal from Monday that upsized from $250 million and on the tight end of talk – were meantime pegged at $24.82 bid, $24.87 offered at mid-morning. A trader noted that the issue had been at $24.85 bid, $24.90 offered earlier in the session.

Like the rest of the market, the issue popped toward the end of the day, ultimately closing in a $24.90 to $24.95 context.

From last week, Monmouth Real Estate Investment Corp.’s $135 million of 6.125% series C cumulative redeemable preferred stock began trading on the New York Stock Exchange under the ticker symbol “MNRPC.”

The paper was trading at $24.66 at mid-morning, down from opening levels of $24.74. In keeping with the overall trend of the market, the preferreds eventually took off, ending at $24.78.

The issue came Sept. 6 via RBC Capital Markets, BMO Capital Markets and J.P. Morgan Securities LLC.

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