Morning Commentary: Citigroup plans $1,000-par sale; Global Indemnity to price $25-par notes

By Stephanie N. Rotondo

Phoenix, Aug. 5 – The preferred stock market’s new issue calendar was building up early Wednesday.

Citigroup Inc. announced plans to sell a $1,000-par issue of series Q fixed-to-floating rate noncumulative preferreds, which are talked at 6.125%, according to a trader.

Citigroup Global Markets Inc. is the bookrunner.

Dividends will be fixed and payable semiannually through August 2020. After that date, the dividend floats at Libor plus a spread and will be payable quarterly.

The preferreds become redeemable in August 2020 or in whole within 90 days of a regulatory capital treatment event at par plus accrued dividends.

At mid-morning, a trader said he had yet to see any gray market quotes for the paper.

Meanwhile, Global Indemnity plc said it would sell at least $75 million of $25-par subordinated notes due 2045.

That deal was being talked in a 7.75% area.

Morgan Stanley & Co. LLC and UBS Securities LLC are running the books.

A trader saw a gray market quote of less 43 bid, less 10 offered early in the session.

Interest will be payable on the 15th day of February, May, August and November. The company can redeem the notes on or after Aug. 15, 2020 at par plus accrued interest.

Among recent deals, the Charles Schwab Corp.’s $600 million of 6% series C noncumulative preferreds – a deal priced July 27 – began trading on the New York Stock Exchange, as was expected.

The preferreds were trading at $25.19 at mid-morning, down from opening levels of $25.22.

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