Entergy Louisiana sells upsized $25-par mortgage bonds; Entergy Arkansas’ issue not free

By Stephanie N. Rotondo

Seattle, Aug. 10 – The preferred stock primary market got another Entergy-linked deal on Wednesday, as Entergy Louisiana LLC brought $270 million of 4.875% $25-par collateral trust mortgage bonds due 2066.

That issue comes on the heels of Entergy Arkansas Inc.’s $410 million sale of 4.875% $25-par first mortgage bonds due 2066 on Tuesday.

“It looks like they are going to do more small deals out of each one of these,” a trader said, referring to each of Entergy Corp.’s subsidiaries.

At 4.875%, price talk on the new issue was in line with the Entergy Arkansas paper, the trader added.

Upon pricing, a trader pegged the new notes at $24.70 bid, $24.75 offered.

The Entergy Louisiana deal came upsized from $150 million.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the books – the same underwriters as the Entergy Arkansas deal.

Also like the Arkansas deal, Entergy Louisiana plans to use proceeds to redeem outstanding issues. Those issues – the 5.875% $25-par first mortgage bonds due 2041 and 6% $25-par first mortgage bonds due 2040 – were weaker in response.

The 5.875% notes (NYSE: ELA) were off 41 cents, or 1.58%, at $25.37. The 6% notes (NYSE: ELB) fell to $25.40, off 35 cents, or 1.36%.

As for Entergy Arkansas, it was pegged at $24.95 bid, par offered at mid-morning but slid to $24.88 bid, $24.90 offered just before the bell.

A trader noted that the Arkansas paper had not freed to trade as of 3:30 p.m. ET.

Elsewhere in the new issue market, Gladstone Land Corp. announced a $25 million sale of 6.375% series A cumulative term preferred stock.

Price talk was 6.5%, according to a market source.

Janney Montgomery Scott LLC led the deal.

Fannie, Freddie mixed

Fannie Mae and Freddie Mac preferreds traded actively on Wednesday, though in mixed fashion.

Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) slipped 4 cents to $4.26, while the 6.5% noncumulative perpetual preferreds (OTCBB: FMCKI) declined 13 cents, or 3.67%, to $3.41.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS), however, inched up 2 cents to $4.32.

The market was hoping to hear news this week regarding the mortgage giants’ court cases. In particular, Perry Capital’s case in the Court of Appeals was expected to produce some sort of ruling.

The case alleges that the government’s “net worth sweep” of virtually all of Fannie and Freddie’s profits was illegal. Though a lower court ruled in favor of the government, the hedge fund appealed that ruling.

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