Morning Commentary: DTE Energy selling $25-par junior subordinated debentures; W.R. Berkley steady

By Stephanie N. Rotondo

Seattle, May 23 – The preferred stock new issue pipeline continued to flow on Monday following the previous week’s steady stream of deals.

DTE Energy Co. announced an offering of at least $150 million of $25-par 2016 series B junior subordinated debentures due June 1, 2076 (expected ratings: Baa1/BBB-/BBB-).

Price talk is around 5.5%.

A trader said there was no selling group.

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are leading the deal.

Proceeds will be used to repay the $300 million of 6.35% 2006 series B senior notes due June 1, 2016 and for general corporate purposes.

As for last week’s deals, W.R. Berkley Corp.’s $290 million of 5.75% $25-par subordinated debentures due 2056 – a deal priced Wednesday – were holding around $24.95, according to a trader.

Looking ahead, a trader said it would “probably be a quiet week,” as the bond market will close early on Friday ahead of the Memorial Day holiday.

The preferred market, however, will remain open all day. Still, the trader speculated that the space will start to shut down early.

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