Morning Commentary: Huntington Bancshares launches new issue; recently priced deals remain active

By Stephanie N. Rotondo

Seattle, March 14 – The preferred stock market’s recent stream of new deals continued on Monday with an offering of series D noncumulative perpetual preferreds from Huntington Bancshares Inc.

A market source placed price talk around 6.25%.

“It’s just launched, so it’s not really trading in the gray,” a trader said, though he saw a $24.60 bid for paper.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are leading the Dividend Received Deduction-eligible deal.

Meanwhile, recently priced issues continued to be in focus, according to the trader.

“Everything that has recently been issued is holding up pretty well,” he said.

KKR & Co. LP’s $300 million of 6.75% series A noncumulative perpetual preferred units, for instance, were trading “in fairly decent size” at $24.85, the trader said.

“Must be the manager,” he added.

That issue came Thursday, upsized from $150 million and in line with the 6.75% price talk.

STAG Industrial Inc.’s $75 million of 6.875% series C cumulative redeemable preferreds – another deal priced Thursday – were pegged at $24.95 bid.

From Tuesday’s business, AmTrust Financial Services Inc.’s $125 million of 7.75% series E noncumulative preferreds were quoted at $24.92 bid, $24.95 offered.

And, Legg Mason Inc.’s $250 million of 6.375% $25-par junior subordinated notes due March 15, 2056 – priced March 7 – were “just hovering right around par,” a trader reported.

Given the overall firm tone of the broader markets and the current “low yield environment,” the trader opined that the primary preferred space would continue to be active.

“I wouldn’t be surprised if we see more deals come,” he said.

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