Morning Commentary: BB&T bringing new issue; SoCal Edison frees up; recent deals in focus

By Stephanie N. Rotondo

Seattle, March 2 – The preferred stock new issue pipeline continued to churn on Wednesday as BB&T Corp. announced an offering of series H noncumulative perpetual preferred stock.

Initial price talk was set in a 5.75% to 5.875% range, according to a market source.

“It should do very well,” a trader said, seeing the issue trading at $24.90 bid, par offered in the early gray market.

The trader also noted that the deal did not have a selling group “yet.”

BofA Merrill Lynch, BB&T Capital Markets, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are running the books.

Proceeds will be used for general corporate purposes.

As investors jockey for the new issue, BB&T’s 5.625% series E noncumulative preferreds (NYSE: BBTPE) were coming in, falling 46 cents, or 1.77%, to $25.59 in early trading.

Meanwhile, Southern California Edison Co.’s SCE Trust V’s $300 million of 5.45% fixed-to-floating rate trust preference securities – a deal priced Tuesday – freed to trade on Wednesday, according to a trader.

The trader quoted the new issue at $25.15 bid, $25.25 offered.

As for Charles Schwab Corp.’s $750 million of 5.95% series D noncumulative perpetual preferreds – a deal priced Monday and freed on Tuesday – those were seen at $25.10 bid, $25.17 offered.

From last week’s business, eBay Inc.’s $750 million offering of 6% $25-par notes due Feb. 1, 2056 – a deal from Feb. 22 – were pegged at $24.70 bid, $24.80 offered. W.R. Berkley Corp.’s 5.9% $25-par subordinated notes due 2056 were seen at $24.90 bid, par offered.

A trader said the latter issue had been assigned its permanent ticker symbol, “WRBPC,” but that it had yet to list on the New York Stock Exchange. He speculated that notes could hit the exchange on Thursday.

On Tuesday, W.R. Berkley said its underwriters had exercised $10 million of its $15 million greenshoe, lifting total issuance to $110 million.

That deal priced Feb. 23.

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