BGC's $25-par notes free up; Qwest to list on NYSE soon; banks take downgrades in stride

By Stephanie N. Rotondo

Phoenix, June 22 - The preferred stock market was shaking off Moody's Investors Service's late-Thursday downgrade of 15 major banks come Friday.

In fact, "everything bounced up a little bit, just from the sell-off yesterday," a trader said.

BGC Partners Inc.'s $100 million issue of 8.125% $25-par senior notes due June 15, 2042 freed to trade Friday, the trader reported. That gave the previously lagging issue a modest boost.

Meanwhile, the recently popular Qwest Corp. 7% notes due 2052 are expected to list on the New York Stock Exchange on Tuesday, according to a trader.

BGC frees up

BGC Partners' new 8.125% $25-par senior notes freed from the syndicate, a trader said Friday.

Paper was quoted at $24.78 bid, $24.82 bid at midday.

The deal priced Wednesday at the low end of talk. The deal was also upsized from $50 million.

Wells Fargo Securities LLC is the bookrunner. Cantor Fitzgerald & Co., Raymond James & Associates Inc. and RBC Capital Markets LLC are the co-managers.

The junior co-managers are CastleOak Securities LP, Keefe, Bruyette & Woods Inc. and Sandler O'Neill & Partners LP.

The company has applied to list the notes on the New York Stock Exchange under the ticker symbol "BGCA." Settlement is expected Tuesday.

Proceeds will be used to repay short-term borrowings under an unsecured revolving credit facility and for general corporate purposes.

BGC is a New York-based brokerage company primarily servicing the wholesale financial and property markets.

Qwest listing soon

A trader informed Prospect News that Qwest's newest issue of 7% notes due 2052 was expected to list on the NYSE on Tuesday.

The ticker symbol is "CTU."

The notes were hanging in at $25.30 at midday.

Qwest priced the $400 million issue on June 14. Proceeds from the sale will be used to take out the previously issued 7% notes due 2052 (NYSE: CTX), which were trading up 5 cents to $25.90.

Qwest is a Monroe, La.-based telecommunications provider.

Banks mixed on downgrade

Bank preferreds were mixed Friday, as investors reacted to news out late Thursday regarding a downgrade of 15 major U.S. and European banks by Moody's.

Goldman Sachs & Co. and JPMorgan Chase & Co. were among the U.S. banks receiving downgrades. But their preferreds were holding in alright.

Goldman's floating-rate series A noncumulative preferreds (NYSE: GSPA) gained 36 cents, or 1.92%, to end at $19.09, while JPMorgan's 8.625% series J noncumulative preferreds (NYSE: JPMPI) increased by 7 cents to $27.36.

European issuers, such as Barclays plc and Deutsche Bank, did not fare as well.

Barclays' 8.125% series 5 noncumulative dollar preference shares drifted down 12 cents to $25.37. Deutsche's 7.6% trust preferreds (NYSE: DTK) lost 11 cents, finishing at $25.43.

The downgrades did not come as a huge surprise, as Moody's had previously stated in February that it was considering altering its previous ratings. The rating agency attributed the rating changes to the fact that the financial institutions "have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities," according to a statement.

As such, there are concerns regarding whether the banks would be able to pay their debts.

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