Morning Commentary: Principal Financial adds $1,000-par notes offering to pipeline; market rises

By Stephanie N. Rotondo

Phoenix, May 4 – The primary preferred stock market was showing signs of life on Monday.

Principal Financial Group Inc. announced plans to sell $1,000-par fixed-to-floating rate junior subordinated notes due 2055.

A trader said initial price talk was in the 4.875% area.

“That just seems really rich, but they will probably get it,” he said.

The trader had not seen any gray markets for paper at mid-morning.

BofA Merrill Lynch, HSBC, Wells Fargo Securities LLC, Barclays, Deutsche Bank Securities Inc. and Goldman Sachs & Co. are running the books.

The Des Moines-based insurance company plans to use proceeds to redeem its outstanding 5.563% series A noncumulative perpetual preferreds (OTCBB: PFGZP), as well as its 6.518% series B noncumulative perpetual preferreds (NYSE: PFGPB).

In early trades, the series As were up 95 cents at 100.75, while the Bs were off a nickel at $25.38.

Looking ahead, a trader said a business development company had a new deal in the works that was slated for Tuesday.

As for secondary trading, the market was getting the week off to a positive start.

The Wells Fargo Hybrid and Preferred Securities index was up 16 basis points at mid-morning.

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