Morning Commentary: Prudential adds $1,000-par notes to pipeline; Eagle Point price talk revealed

By Stephanie N. Rotondo

Phoenix, May 13 – After recovering from early weakness on Tuesday, the preferred stock market continued to trend higher early Wednesday.

The Wells Fargo Hybrid and Preferred Securities index was up 18 basis points at mid-morning.

In the primary arena, yet another $1,000-par issue was announced at the start of the midweek session. Prudential Financial Inc. plans to price $1,000-par fixed-to-floating rate junior subordinated notes due May 15, 2045, according to a regulatory filing.

A trader said price talk was around 5.625%.

“I’m sure they will adjust that down to be more in line with 5.375% to 5.5%,” he said.

Goldman Sachs & Co., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, HSBC and Mizuho Securities are running the books.

In the $25-par space, price talk emerged on Eagle Point Credit Co. Inc.’s planned offering of at least $35 million series A term preferred stock due June 30, 2020.

A trader saw talk around 7.875%. However, he had not seen any gray markets for the issue.

The company registered the new securities on Tuesday.

Deutsche Bank Securities Inc. and Keefe Bruyette & Woods Inc. are the joint bookrunners. Wunderlich Securities Inc., MUFG, Compass Point and Incapital LLC are the lead managers.

Also in the world of term preferreds, Gladstone Investment Corp.’s $35 million of 6.5% series C cumulative term preferred stock due May 31, 2022 began trading on the Nasdaq Global Select Market Wednesday morning.

The deal came May 6. The ticker symbol is “GAINN.”

Post-listing, a trader saw the shares “moving up” to a $25.15 to $25.30 context.

Another source placed the issue at $25.15, up from opening levels of par.

Janney Montgomery Scott LLC was the bookrunner. Co-lead managers included J.J.B. Hilliard, W.L. Lyons, LLC, Wunderlich Securities, William Blair & Co. and Ladenburg Thalmann & Co. Inc.

Maxim Group LLC was the co-manager.

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