Duke Energy taps market; AllianzGI fund’s new preferreds rise; Qwest’s $25-pars mixed

By James McCandless

San Antonio, Sept. 11 – The preferred market saw trading activity focus on newer issues on Tuesday.

Duke Energy Corp. priced an upsized $500 million of $25-par 5.625% junior subordinated debentures due 2078.

AllianzGI Convertible & Income Fund II’s new $109 million of 5.5% series A cumulative preferred shares improved.

Qwest Corp., a wholly owned subsidiary of CenturyLink, Inc., saw its $25-par notes end mixed.

U.S. Bancorp’s $575 million of 5.5% series K non-cumulative perpetual preferred stock declined.

Duke Energy prices

Duke Energy priced an upsized $500 million of $25-par junior subordinated debentures (Baa2/BBB/BBB-) due Sept. 15, 2078 at par with a coupon of 5.625%.

The deal was announced Tuesday morning at an initial size of $200 million and came on the tight side of talk for a coupon in the 5.75% area.

There is no greenshoe.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC are the joint bookrunners.

AllianzGI fund rises

AllianzGI Convertible & Income Fund II’s recent $109 million of 5.5% series A cumulative preferreds gained in active trading.

The preferreds, trading under the temporary symbol “NCZIP,” were up 4 cents to close at $24.84 on volume of about 454,000 shares.

The deal was priced on Sept. 5.

Qwest mixed

Qwest’s $25-par notes were mixed in Tuesday trading. The notes have been rising since Aug. 20, when the company issued a redemption notice for $1.34 billion in total of its 7.5% notes due 2051, two series of 7% notes due 2052 and 7.25% debentures due 2035.

Qwest’s existing 6.5% notes due 2056 (NYSE: CTBB) were up 3 cents to close at $23.97 with about 288,000 notes trading.

The 6.75% notes due 2057 (NYSE: CTDD) were down 7 cents to close at $24.77 with about 253,000 notes trading.

On Monday, the 6.5% notes lost 2 cents.

U.S. Bancorp declines

U.S. Bancorp’s $575 million of 5.5% series K non-cumulative perpetual preferred stock declined.

The preferreds (NYSE: USBPrP) were down 3 cents to close at $25.25 on volume of about 205,000 shares.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.01% at market close, rising after a 0.06% decline in early trading on Tuesday.

The iShares US Preferred Stock ETF was up 4 cents to $37.26.

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