Midday Commentary: Stifel Financial launches $25-par senior notes; SunTrust paper softens

By Stephanie N. Rotondo

Phoenix, Dec. 18 - The primary preferred stock market was eking out deals as the year winds down.

"It's pretty quiet," a trader said. "Generally, lower coupon issues are softening with a drop in the Treasuries."

Stifel Financial Corp. announced an offering of $25-par senior notes due Dec. 31, 2022 on Tuesday.

A trader said the deal was launched at 5.375%.

"It's holding up pretty well," the trader said, seeing a $24.90 bid, $24.94 offered market in the gray at midafternoon.

"There is this feeling that if you are going to bring stuff, you want to do it now ahead of the fiscal cliff," the trader said. With interest rates being at their lows and optimism about the fiscal cliff being avoided - not to mention hope that dividend taxation won't be "too harsh" - issuers are in "a sweet spot," the trader remarked.

"Raise it now while you can at these levels because there is no certainty that you will be able to do it in the first quarter of next year," the trader said.

In other recent deals, SunTrust Banks Inc.'s $450 million of 5.875% series E noncumulative perpetual preferreds - which priced Thursday - were seen at $24.90 bid early in the session.

But a trader said it was manager bids that were keeping them higher and that the issue was losing ground as managers pulled their bids.

He said the last bid he saw for the paper was $24.81.

TCF Financial Corp.'s $100 million of 6.45% series B noncumulative perpetual preferreds were meantime at $24.90 bid.

"I think that was a managers bid again," the trader noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.