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Morning Commentary: Assurant convertible preferreds expected to price; Caesars active on earnings
By Abigail W. Adams
Portland, Me., March 7 – The winter storm set to hit New York City later in the afternoon is not expected to stop the primary market from pricing a new deal.
Assurant Inc. still plans to price $250 million, or 2.5 million shares, of three-year $100-par mandatory convertible preferred stock after the market close Wednesday, despite the pending storm, according to a market source.
Price talk is for a dividend of 6.25% to 6.75% and an initial conversion premium of 17.5% to 22.5%, according to a market source.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners for the registered deal, which carries a greenshoe of $37.5 million, or 375,000 shares.
Assurant is the second mandatory convertible preferred stock offering to price as New York City was pummeled with winter weather.
The last time a large winter storm blanketed New York City with up to a foot of snow on Jan. 4, Sempra Energy priced $1.5 billion in $100-par 6% series A mandatory convertible preferred stock due 2021.
The mandatory convertible preferred stock, which trades on the New York Stock Exchange under the ticker “SREPrA,” was seen trading at $100.89, a decrease of 81 cents, or 0.8%, early in Wednesday’s session.
Caesars Entertainment Corp.’s 5% convertible notes due 2024 were making gains on an outright basis ahead of the company’s fourth-quarter earnings report, which will be announced after the market close.
The notes climbed about 5 points on an outright basis to trade at 193 versus an equity price of $12.675, an increase of 2.63%.
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