Prudential adds $1,000-par notes to pipeline; Eagle Point upsizes sale; Gladstone lists

By Stephanie N. Rotondo

Phoenix, May 13 – The preferred stock market continued to trend higher in Wednesday trading after recovering from early weakness on Tuesday.

The Wells Fargo Hybrid and Preferred Securities Index ended the session up 61 basis points. The index was up 18 bps at mid-morning.

Liquidity, however, was on the thin side, though there was decent ETF trading.

In the primary arena, yet another $1,000-par issue was announced at the start of the midweek session. Prudential Financial Inc. plans to price $1,000-par fixed-to-floating rate junior subordinated notes due May 15, 2045, according to a regulatory filing.

A trader said price talk was around 5.625%.

“I’m sure they will adjust that down to be more in line with 5.375% to 5.5%,” he said.

Goldman Sachs & Co., BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, HSBC and Mizuho Securities are running the books.

In the $25-par space, Eagle Point Credit Co. Inc. priced an upsized $40 million offering of series A term preferred stock due June 30, 2020 with a 7.75% dividend after the close.

That was at the tight end of talk that was seen earlier in the day by a trader at the 7.875% area. However, he had not seen any gray markets for the issue.

The issuer had planned to offer at least $35 million.

The company registered the new securities on Tuesday.

Deutsche Bank Securities Inc. and Keefe Bruyette & Woods Inc. are the joint bookrunners. Wunderlich Securities Inc., MUFG, Compass Point and Incapital LLC are the lead managers.

Also in the world of term preferreds, Gladstone Investment Corp.’s $35 million of 6.5% series C cumulative term preferred stock due May 31, 2022 began trading on the Nasdaq Global Select Market Wednesday morning.

The deal came May 6. The ticker symbol is “GAINN.”

Post-listing, a trader saw the shares “moving up” to a $25.15 to $25.30 context.

The issue ended the day at $25.28, just shy of the day’s high trade.

Janney Montgomery Scott LLC was the sole bookrunner. Co-lead managers included J.J.B. Hilliard, W.L. Lyons, LLC, Wunderlich Securities, William Blair & Co. and Ladenburg Thalmann & Co. Inc.

Maxim Group LLC was the co-manager.

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