Midday Commentary: New deals from DTE Energy, Gabelli free from syndicate; Argo Group, PNC list

By Stephanie N. Rotondo

Phoenix, Sept. 26 - The preferred stock market was taking a bit of a breather Wednesday as Yom Kippur resulted in empty desks and no new issues hit the tape.

A trader also noted that several new issues, such as Aflac Inc.'s $450 million of 5.5% $25-par subordinated debentures due 2052, have yet to get a recording symbol, meaning it is more difficult to find a firm price for the securities. He said that he thinks some investors are waiting for the symbols in order to determine "whether they should buy, sell or hold."

Detroit-based DTE Energy Co.'s $200 million issue of 5.25% $25-par 2012 series C junior subordinated debentures due 2062 freed to trade early in the session.

The deal priced Tuesday at the low end of talk.

A trader saw the issue trading at $25.10 at midday.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers. The co-managers are BNY Mellon Capital Markets LLC, Comerica Securities, Deutsche Bank Securities Inc. and Mitsubishi UFJ Securities.

Proceeds will be used to pay a portion of the purchase price for a portfolio of onsite energy projects, to repay short-term borrowings and for general corporate purposes.

Gabelli Equity Trust Inc.'s new $105 million of 5% series H cumulative perpetual preferred stock also freed up, according to a trader. That paper was also trading at $25.10.

Bank of America Merrill Lynch is the bookrunner.

Proceeds will be used to redeem the company's 6.2% series F cumulative preferreds. Any remaining funds could be used for further preferred redemptions.

Gabelli is a non-diversified, closed-end management investment company based in Rye, N.Y.

Meanwhile, Argo Group US Inc.'s $125 million of 6.5% $25-par 30-year senior notes listed on the Nasdaq exchange on Tuesday, a trader reported.

The symbol is "AGIIL." The deal priced Sept. 18.

At midafternoon, the issue was down 9 cents at par.

Argo is a Hamilton, Bermuda-based underwriter of specialty insurance and reinsurance.

PNC Financial Services Group Inc.'s recent 5.375% series Q noncumulative perpetual preferred stock also listed, hitting the New York Stock Exchange on Wednesday, as was expected.

The $450 million deal priced Sept. 14. The ticker symbol is "PNCPQ."

The preferreds were trading down 4 cents at midday at $24.76.

PNC is a Pittsburgh-based financial services firm.

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