Morning Commentary: Qwest to bring $25-par notes; Entergy Arkansas frees to trade

By Stephanie N. Rotondo

Seattle, Aug. 11 – The preferred stock new deal flow continued on Thursday as rumors from earlier in the week of a telecom deal proved true.

Qwest Corp. said it was offering $25-par senior notes due 2066, with price talk at 6.5% to 6.625%.

“They are trying to grow it, I think,” a trader said of the new issue, seeing paper at $24.85 bid, $24.92 offered in the early gray market.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC are running the books.

Proceeds will be used to redeem the company’s 7.5% $25-par notes due 2051 (NYSE: CTW). That issue was trading off 20 cents at mid-morning to $25.42.

The Entergy deals from Tuesday and Wednesday meantime continued to trade.

A trader said Entergy Arkansas Inc.’s $410 million of 4.875% $25-par first mortgage bonds due 2066 – priced Tuesday – had freed to trade, pegging the notes at $24.90.

However, Entergy Louisiana LLC’s $270 million of 4.875% $25-par collateral trust mortgage bonds due 2066 – from Wednesday’s business – were not yet free, trading at $24.70.

Both issues came via BofA Merrill Lynch, Morgan Stanley and Wells Fargo. Both companies – units of Entergy Corp. – plan to use the proceeds to redeem outstanding issues.

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