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Midday Commentary: GE Capital plans note sale, revises talk; PREIT prices, frees early in session
By Stephanie N. Rotondo
Phoenix, Oct. 2 - A new offering of $25-par senior notes from General Electric Capital Corp. was gaining investor interest on Tuesday.
A preferred stock trader said price talk on the proposed $250 million deal was revised to 4.875% to 5% from around 5% initially. The trader called the pricing "pretty aggressive" and noted that the revision "dropped the bids off a little bit."
He saw the paper at $24.63 bid in the gray market as of midday.
GE Capital intends to use proceeds from the sale of the notes due 2052 to call the 6.625% public income notes due 2032 (NYSE: GEA). The trader said the issue "got clobbered" on the open.
At mid-afternoon, the securities had fallen $1.38, or 5.15%, to $25.40. The trader remarked that it showed how investors should take caution when buying issues that are callable when they are already trading at a premium.
Meanwhile, Pennsylvania Real Estate Investment Trust priced $86.25 million of new 7.375% series B cumulative redeemable perpetual preferred stock.
The deal had already freed to trade, according to a trader. He pegged the preferreds at $24.90 bid, par offered.
Also, DTE Energy Co.'s recent $200 million of 5.25% $25-par 2012 series C junior subordinated debentures due 2062 got the trading symbol "DTQ," a trader said. He expected that the issue - priced Sept. 25 - would list on the New York Stock Exchange as early as Wednesday.
Paper was trading at $25.30 at midday.
A trader said that he was seeing few secondary markets for issues that priced Monday, including Apollo Investment Corp.'s $150 million of 6.625% $25-par senior notes due 2042 and CoBank ACB's $100-par 6.25% perpetual preferreds.
The Apollo issue was seen at $24.62, but there were few markets for CoBank, he said.
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