Week’s issues perk up; Entergy Mississippi lists; Deutsche Bank declines on settlement drama

By Stephanie N. Rotondo

Seattle, Sept. 16 – The week’s new preferred stock issues were trading well early Friday.

Dairy Farmers of America Inc.’s $150 million of 7.125% series C cumulative preferreds – a deal from Thursday – were seen at 102 bid, 102.75 offered at mid-morning. At the close, a market source pegged the paper at 102.5.

The issue came upsized from $100 million and tight to the 7.5% price talk.

Aspen Insurance Holdings Ltd.’s $225 million of 5.625% noncumulative perpetual preference shares were meantime seen at par bid in early trading, moving up to $25.02 by the bell. That issue came on Tuesday.

From Monday’s business, Southern Co.’s $800 million of 5.25% $25-par junior subordinated notes due 2076 were pegged at $25.05 bid, $25.07 offered. However, the notes came in a touch from the intraday high, finishing at $25.02, according to a source.

A trader said the notes could list on the New York Stock Exchange as soon as Tuesday.

And speaking of new listings, Entergy Mississippi Inc.’s $260 million of 4.9% $25-par first mortgage bonds due 2066 listed on the NYSE on Friday, as was expected.

The ticker symbol is “EMP.” The deal priced Sept. 8.

The paper was trading at $24.89 at mid-morning, versus $24.94 at the open. It closed at $24.85.

Deutsche Bank takes dive

Away from new issues, Deutsche Bank AG securities were taking a hit as it was reported that the German bank was not interested in a $14 billion settlement with the U.S. Department of Justice.

The settlement was proposed by the government agency in relation to Deutsche Bank’s involvement with mortgage-backed related securities. Deutsche Bank is saying that it will negotiate with the government in order to get the settlement amount down to similar levels other banks have been slapped with.

The 7.6% trust preferreds (NYSE: DTK) were down 70 cents, or 2.68%, at $25.40. The 6.55% trust preferreds (NYSE: DXB) declined 49 cents, or 1.94%, to $24.75. And the 8.05% trust preferreds (NYSE: DKT) dropped 74 cents, or 2.75%, to $26.21.

A market source said it was “hard to say for sure” what the news meant for Deutsche Bank. “But I think that big number is just a negotiation position on the part of the Justice Department and U.S. Attorney’s Office. [It’s] more likely that it will be in the $4 billion to $6 billion range.

“The $14 billion number implies that Deutsche Bank was nearly as bad in the mortgage market as Countrywide, and I believe that is just not the case.”

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