Preferred Stock Midday Commentary: KeyCorp, First Republic announce calls; NextEra frees up

By Stephanie N. Rotondo

Phoenix, June 13 - The preferred stock market continued to see redemptions of trust preferreds rolling in, a trader said Wednesday.

KeyCorp said in an 8-K filing with the Securities and Exchange Commission that it called its 8% enhanced trust preferreds (NYSE: KEYPF) and its 5.7% TRUPs, citing the Federal Reserve's new capital treatment rules as a regulatory capital treatment event.

The 8% securities were trading down at midday, falling 8 cents to $25.11.

The paper will be redeemed July 12.

A trader said that First Republic Bank called First Republic Preferred Capital Corp.'s 7.25% series D noncumulative preferred shares.

That issue (Nasdaq: FRCCO) fell 21 cents in midday trading to $25.38.

In the new issue arena, NextEra Energy Capital Holdings Inc.'s $325 million of 5.625% series H junior subordinated 60-year notes freed from the syndicate, according to a trader.

The paper was trading up on the break, and the trader pegged the issue around $24.85.

Meanwhile, American Financial Group Inc.'s $200 million offering of 6.375% $25-par senior notes due June 12, 2042 - a deal that priced June 7 - is expected to list on the New York Stock Exchange on Thursday. The securities were "breaching par" in Wednesday trading, a trader said. He saw the issue at $25.03.

Though the midweek session was deemed as "pretty quiet," rumor has it that the new issue calendar will begin to heat up come next week. A source said he was hearing that "some banks" could be bringing new perpetual deals.

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