Regions Financial sells preferreds; KeyCorp preferreds active; Energy Transfer declines

By James McCandless

San Antonio, April 23 – Newer issues were treading water on Tuesday against an overall positive shift in the preferred space.

Regions Financial Corp. priced an upsized $500 million of $25-par series C fixed-to-floating rate non-cumulative perpetual preferred stock with an initial dividend of 5.7%.

Leading trading, KeyCorp’s new 5.625% series G non-cumulative redeemable preferred shares were level.

Elsewhere in finance, U.S. Bancorp’s 6.5% series F non-cumulative perpetual preferreds were pushed upward.

Meanwhile, Energy Transfer Operating, LP’s recent 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units declined.

In communications, Qwest Corp.’s 6.5% notes due 2056 were moving higher in the session.

Utilities name Duke Energy Corp.’s 5.75% series A cumulative redeemable perpetual preferred stock were also on a positive trend.

Regions’ deal

Regions Financial priced an upsized $500 million of $25-par series C fixed-to-floating rate non-cumulative perpetual preferred stock (Ba1/BB+/BB-) with an initial dividend of 5.7%.

The deal, announced Tuesday morning, was upsized from an initial $300 million and came in under talk for a dividend in the 5.875% area.

There is no greenshoe.

Morgan Stanley & Co. LLC, UBS Securities LLC, Wells Fargo Securities, LLC, Goldman Sachs & Co. LLC, RBC Capital Markets, LLC and Regions Securities LLC are the joint bookrunners.

The preferreds are redeemable on or after May 15, 2029 at par. Prior to that, they are redeemable any time after a regulatory capital treatment event.

The dividend is fixed until Aug. 15, 2029, then converts to a floating rate of Libor plus 314.8 basis points.

KeyCorp flat

At the top of volume in the secondary, KeyCorp’s new 5.625% series G non-cumulative redeemable preferred shares were active but flat in the Tuesday session.

The preferreds, trading under the temporary symbol “KEYLL,” closed the session level at $24.82 on volume of about 4.5 million shares.

Elsewhere in the finance space, U.S. Bancorp’s 6.5% series F non-cumulative perpetual preferreds were moving upward.

The preferreds (NYSE: USBPrM) picked up 4 cents to close at $26.82 with about 199,000 shares trading.

Energy Transfer off

Meanwhile, in the oil and gas sector, Energy Transfer’s recent 7.6% series E fixed-to-floating rate cumulative redeemable perpetual preferred units were in decline.

The preferreds, trading under the temporary symbol “ETPEP,” slipped 2 cents to close at $24.88 on volume of about 1.6 million shares.

Qwest higher

Communications name Qwest’s 6.5% notes due 2056 were pushed higher during the trading day.

The notes (NYSE: CTBB) added 9 cents to close at $22.90 with about 227,000 notes trading.

Duke Energy positive

In the utilities space, Duke Energy’s 5.75% series A cumulative redeemable perpetual preferred stock followed the market’s positive trend.

The preferreds (NYSE: DUKPrA) gained 5 cents to close at $25.78 on volume of about 211,000 shares.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.24% at the end of the day, improving on the 0.05% rise at the start of trading Tuesday.

The iShares US Preferred Stock ETF was up 8 cents to $36.64.

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