Morning Commentary: American Financial selling $25-par debentures; CHS lists on Nasdaq

By Stephanie N. Rotondo

Phoenix, Sept. 16 – American Financial Group Inc. announced plans to sell at least $100 million of $25-par subordinated debentures due 2054 on Tuesday.

Price talk is 6.25% to 6.375%, according to one market source.

The company’s existing notes were mixed on the news.

The similarly priced 6.375% senior notes due 2042 (NYSE: AFW) were off a penny in early trading at $25.55. The 7% senior notes due 2050 (NYSE: AFQ) were up 3 cents at $26.29.

The Cincinnati-based insurance company said it could use proceeds from the offering to redeem some or all of the 7% notes, which become redeemable Sept. 30.

About $132 million of the securities are outstanding.

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are running the deal.

Meanwhile, a trader said CHS Inc.’s $475 million of 6.75% series 3 class B reset rate cumulative redeemable perpetual preferred stock was “moving up nicely” as the issue began trading on the Nasdaq Stock Exchange.

He saw the paper trading at $25.30, though he noted that trades as high as $25.50 had occurred early in the session.

The deal came Sept. 8, upsized from an expected $250 million.

BofA Merrill Lynch and Wells Fargo Securities were the bookrunners.

Overall, the mid-morning preferred stock market was slightly soft, as the Wells Fargo Hybrid and Preferred Securities index was down 2 basis points.

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