Duke Energy sells $1 billion preferreds; U.S. Bancorp lower; Morgan Stanley weakens

By James McCandless

San Antonio, March 25 – Active preferred issues were mixed in secondary trading on Monday as one issuer tapped the market for $1 billion.

Duke Energy Corp. priced a $1 billion offering of series A cumulative redeemable perpetual preferred stock at par with a dividend of 5.75% on Monday.

In the secondary, U.S. Bancorp’s 6.5% series F non-cumulative perpetual preferred stock moved lower.

Elsewhere in finance, Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferreds were also negative.

Real estate investment trust National Retail Properties, Inc.’s 5.7% series E cumulative redeemable preferred stock ended slightly better.

Sector peer Public Storage’s 5.6% series H cumulative preferreds were also higher.

Insurance provider Brighthouse Financial, Inc.’s 6.6% series A non-cumulative preferred stock followed the upward path.

Duke Energy taps market

On Monday, Duke Energy priced $1 billion of series A cumulative redeemable perpetual preferred stock (Baa3/BBB/BBB-) at par with a dividend of 5.75%.

There is no greenshoe.

The deal was announced Monday morning.

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

Joint lead managers are Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and BB&T Capital Markets.

The preferreds are redeemable on or after June 15, 2024 at par. Prior to that, they are redeemable within 120 days after a ratings event.

U.S. Bancorp lower

Leading trading in the secondary, U.S. Bancorp’s 6.5% series F non-cumulative perpetual preferred stock moved lower.

The preferreds (NYSE: USBPrM) were down 17 cents to close at $27.12 on volume of about 2.6 million shares.

Elsewhere in the banking and finance space, Morgan Stanley’s 5.85% series K fixed-to-floating rate non-cumulative preferreds were also on the negative side.

The preferreds (NYSE: MSPrK) lost 10 cents to close at $25.95 with about 275,000 shares trading.

On Friday, the preferreds picked 12 cents.

National Retail better

Meanwhile, National Retail Properties’ 5.7% series E cumulative redeemable preferred stock saw a slightly better session.

The preferreds (NYSE: NNNPrE) added 3 cents to close at $25.16 on volume of about 420,000 shares.

Sector peer Public Storage’s 5.6% series H cumulative preferreds also took the positive path.

The preferreds (NYSE: PSAPrH) gained 3 cents to close at $25.37 with about 384,000 shares trading.

Brighthouse up

Insurance provider Brighthouse’s 6.6% series A non-cumulative preferred stock also saw a rise.

The preferreds, trading under the temporary symbol “BHFLL,” added 10 cents to close at $25.35 on volume of about 386,000 shares.

On Friday, the preferreds were up 13 cents.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.27% at the close, extending a 0.4% decrease from early Monday trading.

The iShares US Preferred Stock ETF was down 6 cents to $36.33.

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