Morning Commentary: Preferreds open week lower; Arlington plans ‘best efforts’ deal; NuStar slips

By Stephanie N. Rotondo

Seattle, May 1 – Preferred stocks were edging downward as the first trading session of the month got underway.

The Wells Fargo Hybrid and Preferred Securities index was down 1 basis point at mid-morning, as was the U.S. iShares Preferred Stock ETF.

Despite the day’s slightly negative tone, Arlington Asset Investment Corp. announced a “best efforts” offering of series B cumulative redeemable preferreds.

JonesTrading LLC is running the books.

However, a trader said he had yet to hear any gray markets for the deal, nor had he seen any price talk information.

The company plans to use the proceeds for general corporate purposes.

Arlington Asset is an Arlington, Va.-based real estate investment trust.

Among recent deals, NuStar Energy LP’s $350 million of 7.625% series B fixed-to-floating rate cumulative redeemable perpetual preferred units were dipping with the market.

The units were off a dime at mid-morning, trading at $25.25.

The issue – which priced April 25 – is slated to begin trading on the New York Stock Exchange on Wednesday.

The ticker will be “NSPrB.”

The deal came upsized from $150 million. Price talk was initially 7.875% but was later revised to 7.625% to 7.75%.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and UBS Securities LLC were the joint bookrunners.

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