Morning Commentary: Bank of New York Mellon selling $1,000-par noncumulatives; Tsakos upsized

By Stephanie N. Rotondo

Phoenix, April 23 – The preferred stock market was rebounding early Thursday after closing down modestly the night before.

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points at mid-morning. The index ended Wednesday’s session off 5 bps.

Another new deal hit the tape early in the day, as the Bank of New York Mellon Corp. announced an offering of $1,000-par series E fixed-to-floating rate noncumulative perpetual preferreds.

A trader said he had yet to see price talk on the new issue, though he opined it could come in a 5% to 5.125% context.

The trader also had not seen any gray market quotes for the paper.

Goldman Sachs & Co., Citigroup Global Markets Inc., UBS Securities LLC and BNY Mellon Capital Markets LLC are running the books.

Meanwhile, Tsakos Energy Navigation Ltd. priced an $85 million offering of 8.75% series D cumulative redeemable preferred stock late Wednesday.

The non-rated deal was upsized from $50 million and came at the tight end of talk.

No markets were seen in early Thursday trading, according to a trader.

Morgan Stanley & Co. LLC and UBS Securities are the joint bookrunners. Co-managers include Axia Capital Markets LLC, Evercore Group LLC, Brock Securities LLC and Seaport Global Securities LLC.

Despite the steadiness of the primary pipeline this week, liquidity has been constrained. Several market sources have attributed the lack of trading activity to the Women’s Syndicate Association’s annual cocktail reception, which will kick off Thursday evening in New York.

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