Raymond James new issue remains active, firm; Health Care performance also strong, traders say

By Stephanie N. Rotondo

Portland, Ore., March 2 - Preferred stocks were "slightly green to flat," a trader said Friday.

He noted that "it doesn't seem like there was much going on out there."

Another market source said volume was "moderate." There were "a couple of issues with a lot of liquidity."

He said there was more green than red on the day but remarked that "it probably looks a little more mixed."

Raymond James Financial Inc.'s new issue of 6.9% baby bonds continued to be a focus and was trading stronger.

"It's hanging in there," a trader said.

Health Care REIT Inc.'s new issue was also faring well on the last trading day of the week.

Raymond deal still strong

Raymond James' $350 million of 6.9% $25-par senior notes due March 15, 2042 continued to trade strong on Friday.

A trader pegged the notes at $25.45 in the gray market shortly before the market closed.

Another source said the issue closed at $25.59.

The St. Petersburg, Fla.-based financial services company priced the issue late Wednesday after announcing the deal earlier in the day. A trader had speculated that about 8 million, or $200 million, of the notes were going to be issued, with pricing around 7%. In Wednesday's gray market, the baby bonds were already trading at or above par.

Settlement is expected March 7.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Raymond James & Associates Inc. are the joint bookrunners. Co-managers are Fifth Third Securities Inc., U.S. Bancorp Investments Inc., BB&T Capital Markets and BNY Mellon Capital Markets LLC.

Proceeds will be used to fund part of the company's acquisition of Morgan Keegan & Co. Inc. and MK Holding Inc.

Health Care deal up strong

Health Care REIT's $287.5 million sale of 6.5% series J cumulative redeemable perpetual preferred stock - another deal that priced late Wednesday - also continued to trade fairly well.

A trader saw the paper at $25.30 at mid-session. After the bell, a source said that level was "probably the bid side," with the offering side ranging between $25.35 and $25.37.

Meanwhile, the company's 7.875% series D cumulative redeemable preferred stock (NYSE: HCNPD) gained a penny, closing at $25.36. The 7.625% series F cumulative redeemable preferred stock (NYSE: HCNPF) earned a nickel, ending at $25.48.

Proceeds from the new issue will be used to redeem both of those issues, with any remaining funds going toward general corporate purposes.

Health Care will apply to list the preferreds on the New York Stock Exchange under the ticker symbol "HCNPJ." Settlement is expected March 7.

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Co-managers are Barclays Capital Inc, Raymond James & Associates, RBC Capital Markets LLC and Stifel, Nicolaus & Co. Inc.

The real estate investment trust is focused on senior housing and health-care facilities and is based in Toledo, Ohio.

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