Morning Commentary: New issues from Qwest, Entergy get attention; preferreds unfazed by U.S. data

By Christine Van Dusen

Atlanta, Aug. 12 – Investors in the preferred stock market on Friday were mostly focused on recent new issues as the spike in the Treasury market, prompted by disappointing economic data from the United States, didn't do much to ding preferreds.

Qwest Corp. – which brought $850 million of 6.5% $25-par senior notes due 2056 late on Thursday – saw the new issue trade on Friday morning at $24.92, following Thursday’s level of $24.85 bid, $24.90, a trader said.

The pricing was “pretty juicy compared to the existing listed,” he said.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC were the bookrunners for the deal, the proceeds of which will be used to redeem the company’s 7.5% $25-par notes due 2051 (NYSE: CTW).

That issue traded Friday morning at $25.45, flat to Thursday.

Meanwhile, the Entergy deals from Tuesday and Wednesday continued to trade.

Entergy Arkansas Inc.’s $410 million of 4.875% $25-par first mortgage bonds due 2066 – which priced Tuesday – traded Friday morning between $24.88 and $24.90 after Thursday’s $24.90.

Entergy Louisiana LLC’s $270 million of 4.875% $25-par collateral trust mortgage bonds due 2066 – from Wednesday’s business – traded between $24.77 and $24.82 after Thursday’s range of $24.70 to $24.75, the trader said.

Both issues came via BofA Merrill Lynch, Morgan Stanley and Wells Fargo. Both companies, which are units of Entergy Corp., plan to use the proceeds to redeem outstanding issues.

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