Annaly preferreds improve in trading; SoCal Edison unit sells $475 million of trust preferreds

By Andrea Heisinger

New York, May 10 - Annaly Capital Management Inc.'s new series C preferred stock traded up on Thursday after being freed for trading in an otherwise quiet market.

Southern California Edison Co. unit SCE Trust I priced $475 million of 5.625% perpetual cumulative trust preferred securities at $25 after the close.

The market overall was quiet, a trader said, adding that there was "a little firming."

"We've been in the red most of the week. Nothing's really moving one way or the other. The week's over - nothing for tomorrow."

A trader said after the close that the market was "better than it has been."

"Liquidity remains challenged," he added.

Annaly's series C

Annaly Capital Management's $275 million offering of 7.625% series C cumulative redeemable preferred stock sold Wednesday at $25.00 was trading at $24.70 to $24.75 after being freed to trade early in the afternoon.

By early Thursday afternoon, a trader quoted the paper as "soft and trading around the [$24].60 level, $24.65 bid. They're trading up."

On Wednesday, the preferreds were trading at $24.70 in the gray market ahead of pricing and were later seen by another market source at $24.60 bid, $24.67 offered after the bell but before the deal actually priced.

Annaly is a New York-based real estate investment trust and asset manager.

SCE's trust preferreds

SCE Trust I announced and priced an upsized $475 million of 5.625% perpetual cumulative trust preference securities at par of $25 late on Thursday, a market source said. Southern California Edison is guarantor.

The trust preferreds were sold at the tight end of guidance, which was initially in the 5.75% area and later revised to 5.625% to 5.75%. The size of the offering was increased from $400 million.

The trust preferreds were quoted at $24.90 in the gray market ahead of pricing.

"I think they're going to price at 5.625%," the trader said. "I don't think they'll push more than that. They're being priced well. The deal's doing very well."

The securities have a dividend payable quarterly on March 15, June 15, Sept. 15 and Dec. 15 beginning on Sept. 15.

There is a call option at par plus accrued dividends on or after June 15, 2017.

The company has applied to list the securities on the New York Stock Exchange under the ticker "SCE PR F."

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC and UBS Securities LLC were the bookrunners.

Co-managers were BNP Paribas Securities Corp., BNY Mellon Capital Markets LLC, Siebert Capital Markets, SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc.

Proceeds are being used to repay commercial paper borrowings and/or for general corporate purposes.

Southern California Edison is an electric utility based in Rosemead, Calif.

© 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.