New issues eyed in coming week; National General underperforms; CHS registers preferreds

By Stephanie N. Rotondo

Phoenix, June 20 – The preferred stock market was subdued early Friday, with one trader attributing the lack of activity to the summer doldrums.

Still, he said he “heard there will be some more new issues next week, so that’s good.”

The trader said there could be up to three deals in the coming week, and while he did not have any specific names, there was one sector he did not expect to see.

“With National General Holdings Corp. not doing so well, I’d be shocked if we saw another insurance deal,” he said.

The New York-based company launched an offering of series A noncumulative perpetual preferreds on Monday. The deal was originally expected to be $100 million, but only $55 million of the preferred shares priced on Wednesday.

The issue came at 7.5%, at the tight end of talk.

The trader saw the issue at $24.75 on Thursday, compared to a $24.65 to $24.75 context previously.

The trader also noted that the preferreds had been assigned a temporary trading symbol of “NTGNP.”

CHS Inc. could be among those slated to bring a deal, as the company registered up to $2 billion of class B cumulative redeemable preferreds on Friday.

Though the Inver Grove Heights, Minn.-based integrated agriculture company said it has no current plans to use the shelf registration, the company remarked that any proceeds raised from such an offering would provide flexibility to finance future business opportunities.

The company’s 7.1% class B, series 2 reset rate cumulative redeemable preferreds (Nasdaq: CHSCN) ended the day down 2 cents at $27.27.

Overall, the secondary market was pretty much flat as the week came to a close.

The Wells Fargo Hybrid and Preferred Securities index ended the day unchanged. The index had been up 1 basis point at mid-morning and hit its highs just after lunch. From there, it was a steady decline to come back to even.

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