NuStar’s new preferred units free to trade; Qwest notes get symbol; American Homes lists

By Stephanie N. Rotondo

Seattle, April 26 – Preferred stock investors continued to eye recently priced issues in midweek trading.

NuStar Energy LP’s $350 million of 7.625% series B fixed-to-floating rate cumulative redeemable preferred units – a deal priced Tuesday – had already freed to trade by mid-morning on Wednesday, according to a trader.

He also said that the paper had been assigned a temporary ticker symbol, “NUSRP.”

The trader said the units were trading “around $25.25, in decent size.”

The paper finished at that level, which compared to $25.17 at the open.

The company’s 8.5% series A fixed-to-floating rate cumulative redeemable preferred units (NYSE: NSPrA) were also higher on the day, trading up 14 cents to $26.63.

The deal came upsized from $150 million. Initial price talk was 7.875% but was later revised to 7.625% to 7.75%.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC are the joint bookrunners.

Distributions will be fixed until June 15, 2022, at which point the rate will float at Libor plus 564.3 basis points.

The units also become redeemable on that date at par plus accrued distributions. The issue can also be called upon a rating agency event or a change of control.

Proceeds will be used to help fund the acquisition of Navigator Energy Services LLC. The purchase price is $1,475,000,000.

Meanwhile, Qwest Corp.’s $575 million of 6.75% $25-par notes due 2057 – a deal priced April 18 – was also assigned a symbol, a trader reported.

However, he was not sure if the ticker was to be the actual listing or if it was a temporary symbol.

The symbol is “CTDD.”

The notes were seen trading at $24.85 in early dealings.

As was expected, American Homes 4 Rent’s $150 million of 5.875% series F cumulative redeemable preferreds officially listed on the New York Stock Exchange under the ticker “AMHPrF.”

That issue finished the day at $24.73, which compared to $24.72 at the open.

The deal came April 19.

And, rounding out the recent issues, Wells Fargo & Co.’s $600 million of 5.625% $25-par series Y class A noncumulative perpetual preferred stock (NYSE: WFCPrY) was once again the most actively traded security of the session, with more than 1.54 million preferreds being exchanged.

After falling below par in the previous session, the preferreds were regaining ground, rising 6 cents to $25.01 by mid-morning. But the issue eventually finished below the par mark, at $24.99.

Still, that equaled a gain of 4 cents on the day.

The issue priced April 17, coming upsized from $250 million. Price talk was 5.875%.

GSEs get a boost

GSE-linked preferreds were on the rise on Wednesday following remarks from Treasury secretary Steven Mnuchin.

“They are going crazy because of Mnuchin’s comments,” a trader said.

On Wednesday, Mnuchin said that GSE reform was on the table and that a plan was slated for the second half of the year.

However, Mnuchin did not give any further information on the supposed plans.

Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 18 cents, or 2.53%, at $7.30. The 8.25% series T noncumulative preferreds (OTCBB: FNMAT) meantime gained 11 cents, or 1.57%, to close at $7.13.

Freddie Mac’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were also better, adding 30 cents, or 4.55%, to end at $6.90.

Of the three issues, Freddie’s were the most actively traded.

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