Morning Commentary: Southern Co.’s 5.25% $25-par notes not yet free; recent deals trade down

By Stephanie N. Rotondo

Seattle, Sept. 13 – Recently priced preferred issues were drifting downward on Tuesday as the broader markets also came in.

The Southern Co.’s $800 million of 5.25% $25-par junior subordinated notes due 2076 were not yet free to trade as of mid-morning, a trader said. The deal came Monday, upsized from $250 million and on the tight end of talk.

The trader quoted the issue at $24.80 bid, $24.89 offered.

From last week’s business, Customers Bancorp Inc.’s $75 million of 6% series F fixed-to-floating rate noncumulative preferreds were pegged at $24.92.

That issue also came upsized and tight to talk.

Entergy Mississippi Inc.’s $260 million of 4.9% $25-par first mortgage bonds due 2066 were meantime seen at $24.70 bid in early trading. The deal came Thursday.

From Wednesday, Associated Banc-Corp’s $100 million of 5.375% series D noncumulative preferreds remained under pressure, slipping to $25.17 offered, according to a trader.

Meanwhile, Fannie Mae and Freddie Mac preferreds continued to lose ground on Tuesday. The securities have been weaker in recent days but have been punished by Friday’s news that a U.S. District Court judge dismissed a shareholder lawsuit brought in regards to the government’s net worth sweep.

The preferreds were down 3% to 6% at mid-morning.

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