Entergy Arkansas frees to trade; Prudential remains active in low-volume secondary market

By Andrea Heisinger

New York, Dec. 7 - The trend of a flat preferred stock market continued on Friday amid low trading volume.

"Volume is a little lightish," one trader said at midday.

By the market close, volume was "kind of off 6 basis points, or a penny," a source said. "The market fades on Friday afternoon."

Another trader commented at midday that the "secondary is pretty flat."

"I would say it's about 2 cents off [overall]," the trader said.

The new $200 million of 4.9% $25-par mortgage bonds due 2052 from Entergy Arkansas Inc. were a hot commodity and had freed to trade at midmorning in the New York session, a trader said.

"It's hard to find right now," he added. "It's bid up. We've seen it at $25.08, a lot of par trades, and I would say the average is $25.05."

Ahead of the close, trading was seen mostly at par, with some bids of $24.98, a trader said.

The $750 million of Citigroup Inc. 5.9% perpetual fixed-to-floating rate notes priced late Thursday were quoted at "par and an eighth" by one trader.

The preferreds carry a fixed rate until February of 2023, and a floating rate of Libor plus 423 basis points afterward.

Citigroup Global Markets Inc. was the bookrunner for the sale.

Bank of America eyed

There was market chatter of Bank of America Corp. perhaps following Citigroup's lead in pricing preferreds soon.

"With Citi bringing their perpetual, I would guess that BofA's not far behind," a trader said. "They have a lot of TRUPs and other stuff they could clean up. If they could bring something with a sub-6 [percent coupon] now, it would make sense."

The trader added that the bank and other issuers "don't want to see what happens" with fiscal cliff talks in Congress or the possibility of a credit rating downgrade for the United States.

"It's just conjecture at this point," he said of the possibility of a Bank of America preferred issue.

Recent deals active

Recent sales from Comcast Corp. and Prudential Financial Inc. that have been active throughout the week remained that way on Friday.

The Comcast 5% $25-pars due Dec. 15, 2061 were quoted at $25.35 in midday trading Friday, a source said. They were at $25.20 at Thursday's close.

Prudential's 5.75% $25-par junior subordinated notes due Dec. 15, 2052 were seen at $25.40 in midday trading. The shares were quoted at $25.20 at the market close Thursday.

By midafternoon, Prudential's notes were the most active with 838,000 trades, at a volume of $25.24.

These notes were followed by a Royal Bank of Scotland series T preferred, which had 701,000 shares trade at a level off by 17 cents at $24.25.

An Ally Financial Inc. series A preferred saw 234,000 shares trade, up 9 cents on the day to $26.51.

Two outstanding issues from PS Business Parks Inc. were also among the most active, a trader said, possibly due to news out Thursday that the company has scheduled an ex-dividend for Dec. 10 and a cash dividend.

A 6.45% series S preferred from PS Business Parks had 646,000 shares trade, off 17 cents at $26.55. A series T preferred from the company was the fifth most actively traded issue of the day, with 218,000 trades, up 9 cents to $26.04.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.