CMS Energy prices baby bonds; Legacy Reserves preferred units soar; KeyCorp stumbles

By Abigail W. Adams

Portland, Me., March 5 – The primary market was active on Monday with the pricing of a new baby bond deal. CMS Energy Corp. priced $200 million of 5.625% $25-par junior subordinated notes (Baa2/BBB-/BB+) due March 15, 2078.

CMS Energy’s baby bond offering is the first new deal of March.

Preferreds rebounded and closed Monday with gains after a slight dip into negative territory in early trading.

The Wells Fargo Hybrid & Preferred Securities Financial index closed Monday up 0.44%. The U.S. iShares Preferred Stock ETF closed Monday up 0.40%.

Legacy Reserves LP’s series A and series B fixed-to-floating rate cumulative redeemable preferred units saw enormous gains on Monday. The preferred units, which ricocheted between losses and gains in January, have seen steady upward momentum since the release of fourth-quarter and year-end earnings reports on Feb. 23.

KeyCorp’s depositary shares representing 6.125% series E fixed-to-floating rate non-cumulative preferred stock was down in high-volume trading. The Cleveland-based regional bank announced a change-up in leadership on Monday.

CMS Energy priced a $200 million offering of $25-par junior subordinated notes due March 15, 2078 with a coupon of 5.625% after the market close Monday. The baby bond deal is the first new deal in the $25-par market to price in March.

BofA Merrill Lynch, RBC Capital Markets Corp. and Wells Fargo Securities LLC are the joint bookrunners for the offering.

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