NuStar’s new units free to trade, trend higher; Fannie, Freddie mixed; Citigroup declines

By Stephanie N. Rotondo

Seattle, Nov. 18 – The preferred stock market was trending upward in early Friday trading but followed the equity markets lower by day’s end.

The Wells Fargo Hybrid and Preferred Securities index ended down 77 basis points, after being up 10 bps at mid-morning.

NuStar Energy LP’s $200 million of 8.5% series A fixed-to-floating rate cumulative redeemable perpetual preferred units were gaining ground, after trading weakly post-pricing on Thursday.

The issue freed to trade in the afternoon. After freeing, the preferreds traded up to $24.87, which one market source said was “toward the high end of the range” they were trading at all day.

One market source pegged the units at $24.80 bid, $24.86 offered in the early gray market, which compared to $24.68 bid, $24.78 offered on Thursday.

At another desk, the units were seen at $24.80 bid, $24.82 offered.

The deal came Thursday, upsized from $100 million and in line with price talk. The units begin to float on Dec. 15, 2021 at Libor plus 676.6 bps.

Wells Fargo Securities LLC, BofA Merrill Lynch and UBS Securities LLC ran the books.

Meanwhile, Fannie Mae and Freddie Mac preferreds were mixed in early dealings and stayed that way through the close.

And Citigroup Inc.’s paper was lower for the session.

The 7.875% fixed-to-floating rate trust preferred securities (NYSE: CPN) fell 7 cents to close at $25.88.

The 5.8% series C noncumulative preferreds (NYSE: CPC) were down 39 cents, or 1.59%, to $24.15.

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