Midday Commentary: Telephone & Data, Entergy New Orleans announce senior notes offerings

By Stephanie N. Rotondo

Phoenix, Nov. 26 - The preferred stock market was "still asleep," a trader said Monday, adding that the space was dealing with a "Thanksgiving hangover."

Despite said hangover, two new deals hit the tape early in the day and were already performing well in the gray market.

Telephone & Data Systems Inc. announced an offering of at least $100 million of $25-par senior notes due Dec. 1, 2061.

Price talk is 5.875% to 6%, according to a trader. Pricing is expected as early as Monday.

The trader noted that there is no selling group.

Paper was offered at $24.75 in the gray market as of midday.

Meanwhile, Entergy New Orleans Inc. plans to sell at least $30 million of $25-par first mortgage bonds due Dec. 1, 2052.

Price talk is around 5.125%.

That issue was trading around par in the gray market at midafternoon.

"They're small, well-known names," the trader explained as the reason for the deals' positive performance. Entergy specifically "always trades at a premium."

The trader also remarked that both deals were senior notes, which could be attractive to investors.

Overall, the preferred arena "seems to be mixed," even as the straight equity market was declining on "fiscal cliff" concerns. He said some issues were down as much as 30 to 40 cents but did not think that was all that significant, especially as it did not appear to be in any one particular sector.

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