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Midday Commentary: State Street to offer fixed-to-floating noncumulatives; Allstate to free to trade
By Stephanie N. Rotondo
Phoenix, Feb. 25 - The preferred stock market remained slightly weak on Tuesday following Monday's dip.
As of mid-morning, the Wells Fargo Hybrid and Preferred Securities Index was down just 1 basis point.
State Street Corp. kept the primary market churning as the Boston-based bank announced an offering of series D fixed-to-floating rate noncumulative preferreds.
A trader said price talk was around 6.25%, though he heard it could be tightened.
"There's no selling group," he added.
Early in the session, he saw a gray market bid at $24.80, though that later moved up to $24.95.
Morgan Stanley & Co. Inc., BofA Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunners.
Proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, potential acquisitions, investments or loans to subsidiaries, refinancing of outstanding obligations, shares repurchases or dividends.
Meanwhile, Allstate Corp.'s $650 million of 6.625% series E noncumulative preferreds - a deal that came Monday - was quoted at $24.78 bid, $24.80 offered around mid-morning.
A trader said he heard the issue was set to free up soon.
Morgan Stanley & Co. Inc., BofA Merrill Lynch, Goldman Sachs & Co., JPMorgan Securities LLC, UBS Securities LLC and Wells Fargo Securities LLC led that offering.
Among other recent deals from insurance companies, Kemper Corp.'s $150 million of 7.375% $25-par subordinated debentures due 2054 were pegged at $25.05 bid, $25.12 offered.
The notes came Thursday via JPMorgan Securities LLC and Wells Fargo Securities LLC at par of $25.00.
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