Andeavor Logistics prices $600 million preferred units; preferred stocks mostly soft

By Cristal Cody

Tupelo, Miss., Nov. 28 – Andeavor Logistics LP tapped the preferred stock market on Tuesday with a $600 million offering of fixed-to-floating rate cumulative redeemable perpetual preferred units.

The company does not plan to list the preferreds on any securities exchange.

The deal follows transactions brought to the primary market on Monday from E*Trade Financial Corp. and NuStar Energy LP.

NuStar Energy’s $150 million of $25-par 9% fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba3/B/B+) were freed to trade over the counter under the temporary symbol “NSSTP”.

The preferreds were seen going out on Tuesday at $24.65.

Looking at the overall market, preferred stocks remained weak over Tuesday’s session.

The Wells Fargo Hybrid and Preferred Securities index closed off 6 basis points.

The U.S. iShares Preferred Stock ETF dropped 10 bps.

In Andeavor Logistics’ offering, the company priced $600 million of 6.875% series A fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba3/BB/BB) on Tuesday, according to an FWP filing with the Securities and Exchange Commission.

On or after Feb. 15, 2023, the rate will convert to a floating rate of Libor plus 465.2 bps.

BofA Merrill Lynch, Goldman Sachs & Co., Credit Suisse Securities (USA) LLC and Wells Fargo Securities LLC were the bookrunners.

Andeavor is a San Antonio-based marketing, logistics and refining company.

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