First Niagara, DTE new issues stay strong; Viacom active, higher on redemption; financials up

By Stephanie N. Rotondo

Portland, Ore., Dec. 9 - Preferred stocks experienced "a pretty progressive morning," a market source said Friday.

By afternoon, things were "bouncing around," but they "ultimately closed at their highs."

Still, volume was "fairly light."

"It's been incredibly quiet," another trader said.

In recent new issues, First Niagara Financial Group Inc.'s new fixed-to-floating series B preferreds "continued to stay firm," a source said. DTE Energy Co.'s 6.5% junior subordinated notes - which officially listed on the New York Stock Exchange on Thursday - were also trading up.

Meanwhile, Viacom Inc.'s 6.85% senior notes due 2055 were the day's most actively traded securities. Earlier in the week, the company said it will redeem the notes on Jan. 9.

First Niagara remains strong

First Niagara Financial's $350 million issue of fixed-to-floating series B preferreds remained firm, a market source said.

He placed the issue at $25.25, up from $25.20 previously.

"For a financial, that's great," he said.

The issue from the Buffalo-based regional bank priced late Wednesday. The rate is fixed at 8.625% until Feb. 15, 2017, at which time the rate will become Libor plus 732.7 basis points.

The deal was originally slated to be $250 million, but it was upped to $350 million due to high demand. A source said that he heard demand was $450 million to $475 million and that, as such, pricing was "reigned in" to 8.625% from 8.75%.

Additionally, the company canceled a $37.5 million over-allotment option.

The deal freed to trade on Thursday.

First Niagara can call the issue on any dividend payment date on or after Feb. 15, 2017 at par plus any declared and unpaid dividends.

Settlement is expected Wednesday.

Goldman Sachs & Co. is the global coordinator for the offering, and Bank of America Merrill Lynch is the physical bookrunner. Goldman Sachs, Merrill Lynch and Wells Fargo Securities, LLC are the joint bookrunning managers. Citigroup Global Markets Inc. is the joint lead manager, and Sandler O'Neill + Partners, LP is co-manager.

Proceeds will be used to complete the bank's acquisition of branches of HSBC Bank USA, NA, which was announced July 31.

DTE issue firms

DTE Energy's 6.5% junior subordinated notes due 2061 were on the rise in active trading during Friday's session.

The notes (NYSE: DTZ) traded up 6 cents to $25.67.

The issue officially listed on Thursday.

The Detroit-based energy provider priced the deal on Nov. 28. The next day, the company said it was using proceeds from the new issue to redeem its 7.8% trust preferreds (NYSE: DTEPA) and 7.5% trust preferreds (NYSE: DTEPC).

Viacom to redeem notes

Viacom's 6.85% senior notes were trading busily Friday as investors prepare for an upcoming redemption.

The notes (NYSE: VNV) traded up to $25.26.

The New York-based entertainment provider said Wednesday that it will redeem all $750 million of the notes at par plus accrued interest on Jan. 9.

Financials gain steam

Financials were performing better during the last trading day of the week, propelled by hopes that Europe might be on its way to solving its economic crisis.

Goldman Sachs Group Inc.'s 6.5% notes due 2061 (NYSE: GSJ) traded up 15 cents to $24.67, while ING Groep NV's 7.375% perpetual hybrid capital securities (NYSE: IDG) moved up 20 cents to $18.91.

Bank of America Corp.'s 8.2% series H depositary shares (NYSE: BACPH) rose a quarter, or 1.11%, to $22.70.

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