New preferred issues take investors' focus; Pitney deal prices; Kennedy offering does not

By Stephanie N. Rotondo

Phoenix, Nov. 20 - It was "busy in the new issue market," a preferred stock trader said Tuesday.

Another market source noted that "activity was better" than in the previous session, though he too said it was "still mostly the newer issues."

Pitney Bowes Inc. priced an offer of $100 million of 5.25% $25-par senior notes due Nov. 27, 2022 late Monday. Come Tuesday, the deal "looks fine," a trader said.

However, there continued to be no markets for Kennedy-Wilson Holdings Inc.'s proposed $75 million of $25-par senior notes due Dec. 1, 2042, which is being talked around 7.25%.

"The pot is still open," a trader said of the deal that was announced alongside Pitney's on Monday. "I think they're trying to move whatever they can."

The trader noted that the name was not well known, which was keeping investors at bay.

"It leads the manager to say 'come one, come all'," he said. "If you want shares, you're going to the manager; you're not going to buy them in the gray."

Pitney Bowes brings deal

Pitney Bowes' new $100 million of 5.25% $25-par senior notes due Nov. 27, 2022 was pegged at $24.75 at midday by a trader.

After the market closed, another source said there were late-day trades at par.

"Somebody was driving it up at the end," he said.

Still, the issue closed at the $24.75 mark.

The deal came late Monday, upsized from $75 million and at the low end of price talk.

Morgan Stanley & Co. LLC and Bank of America Merrill Lynch are the joint bookrunners.

Proceeds will be used for general corporate purposes. The securities are expected to be listed on the New York Stock Exchange.

Newer issues rally

In recent deals, Taylor Capital Group Inc.'s $100 million of 8% series A noncumulative perpetual preferred stock seemed to be doing better, with a trader quoting the issue at $24.95 bid, par offered.

With an 8% coupon, "if you know the bank, it's pretty enticing," a trader said. Investors that know that name and like it are "not afraid of a small, non-rated retail bank."

The deal priced Thursday.

And, First Republic Bank's $150 million of 5.625% series C noncumulative perpetual preferreds were "catching a bid now," a trader said, placing the issue at $24.60 bid.

The preferreds had been trading around $24.55 previously, he noted.

Still, the trader was not waxing poetic about the deal that came Thursday.

"I like the name, but I wasn't a big fan of the pricing on that," he said, calling it aggressive.

Meanwhile, NextEra Energy Capital Holdings Inc.'s $500 million of 5.125% $25-par series I junior subordinated debentures due Nov. 15, 2072 - a deal that came Nov. 14 - was "bouncing back," a source said, trading at par.

Wells' new deal to list

Wells Fargo & Co.'s $600 million of 5.125% series O noncumulative perpetual class A preferred stock is expected to list on the New York Stock Exchange on Wednesday.

The deal priced a week ago. The ticker symbol will be "WFCPO."

A trader quoted the preferreds at $24.95 bid, par offered. Another source said the paper closed up a penny at $24.94.

In other Wells news, the San Francisco-based bank announced dividends for three series of its preferreds, including the 8% series J noncumulative perpetual class A preferreds (NYSE: WFCPJ), which made the day's most active list.

The issue was up 19 cents at $29.56.

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