Morning Commentary: Atlas Resource selling preferred units; Dominion to price $1,000-par notes

By Stephanie N. Rotondo

Phoenix, Sept. 24 – The primary preferred stock market saw a couple more deals added to the calendar early Wednesday.

Atlas Resource Partners LP announced plans to sell at least $50 million of class D cumulative redeemable perpetual preferred units, talked in an 8.625% area.

Morgan Stanley & Co. LLC and UBS Securities LLC are leading the non-rated deal.

Pricing is expected on Thursday.

Proceeds will fund a portion of the company’s planned purchase of assets in the Eagle Ford Shale region of south Texas.

Meanwhile, Dominion Resources Inc. said it was selling $1,000-par series A enhanced junior subordinated notes due Oct. 1, 2054.

Barclays, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are managing that deal.

Through Oct. 1, 2024, interest will be paid semiannually at a fixed rate. After that date, the interest rate will float at Libor plus a spread and will be payable quarterly.

Proceeds will be used for general corporate purposes, including the redemption of the 8.375% 2009 series A enhanced junior subordinated notes due 2064 (NYSE: DRU).

That issue was trading off 47 cents, or 1.83%, to $25.24 at mid-morning.

Neither issue was attracting much notice early in the session, according to a trader.

Among other deals from the week, Qwest Corp.’s $500 million issue of 6.875% $25-par senior notes due 2054 were quoted at $24.50 bid, $24.55 offered.

The notes priced Monday and freed to trade on Tuesday.

After regaining some ground in Tuesday trading, the preferred stock market resumed its downward descent on Wednesday.

The Wells Fargo Hybrid and Preferred Securities index was down 15 basis points at mid-morning.

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