Midday Commentary: New issue calendar ramps up with Duke Energy, Homeowners Choice issues

By Stephanie N. Rotondo

Phoenix, Jan. 9 - Talk of a "possible utility" deal on Tuesday came to fruition on Wednesday as Duke Energy Corp. announced plans to sell at least $200 million of $25-par junior subordinated debentures due 2073.

Price talk was originally 5.25% to 5.375%, according to a trader. It was then revised to around 5.125%.

"It's going pretty well," a trader said. "There have been strong bids the entire time, even with the revised price talk."

He said the issue was trading in a range of $24.95 to par in the midday gray market.

The primary preferred space was "busy," the trader said, noting that a "preemie" deal from Homeowners Choice Inc. was also circulating.

The trader said he expected the sale of the $25-par senior notes due 2020 would be a couple million shares at best, adding that price talk was around 8%.

However, he had not seen any markets for the new issue.

Meanwhile, TravelCenters of America LLC's new $100 million of 8.25% $25-par senior notes due 2028 - a deal that priced Tuesday - was "holding in" at less 28 bid, less 23 offered, according to a trader.

Earlier in the session, he saw a $24.60 bid for paper, which he assumed was a manager bid. "Somebody hit a less 28 bid" after that, he said, but overall, trading in the securities was quiet.

But Public Storage's new $450 million issue of 5.2% series W cumulative redeemable perpetual preferreds were "still spinning around," trading "locked" at $24.90.

That issue priced Monday and freed to trade on Tuesday.

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