E*Trade Financial, NuStar Energy tap preferred stock primary; preferreds close mixed

By Cristal Cody

Tupelo, Miss., Nov. 27 – Two issuers tapped the preferred stock market on Monday, including one offering in the works since mid-November.

E*Trade Financial Corp. priced $300 million of fixed-to-floating rate non-cumulative perpetual preferred shares.

NuStar Energy LP sold $150 million of fixed-to-floating rate cumulative redeemable perpetual preferred units in a deal announced earlier in November.

NuStar Energy’s preferred units were freed to trade over the counter on Monday afternoon under the temporary symbol “NSSTP”.

Preferred stocks ended the session mixed.

The Wells Fargo Hybrid and Preferred Securities index fell 16 basis points.

The U.S. iShares Preferred Stock ETF rose 3 bps.

E*Trade prices $300 million

E*Trade Financial priced $300 million of 5.3% series B fixed-to-floating rate non-cumulative perpetual preferred stock (Ba3/BB) on Monday, according to an FWP filing with the Securities and Exchange Commission.

The issuance consists of 300,000 depositary shares, which represent 1/100th of a share of the series B preferreds.

The depositary shares have a liquidation preference of $1,000 per share.

The preferreds have a fixed rate to but excluding March 15, 2023. Thereafter the rate will convert to a floating rate of Libor plus 316 bps.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the bookrunners.

The company does not plan to list the depositary shares or preferred stock on any securities exchange or interdealer market quotation system.

Proceeds will be used to fund E*Trade’s acquisition of Trust Company of America, Inc. and for general corporate purposes.

E*Trade is a New York City-based financial services company that provides online brokerage and related products and services.

NuStar sells preferreds

NuStar Energy priced $150 million of $25-par 9% series C fixed-to-floating rate cumulative redeemable perpetual preferred units (Ba3/B/B+) on Monday, according to an FWP filed with the SEC.

The company sold 6 million units in the offering.

The deal includes an over-allotment option of an additional 900,000 units.

The issue has a fixed rate until Dec. 15, 2022, after which the rate will convert to a floating rate of Libor plus 688 bps.

Wells Fargo Securities, BofA Merrill Lynch, JPMorgan and RBC Capital Markets, LLC were the bookrunners.

The units have a liquidation preference of $25.00 plus accumulated and unpaid distributions.

Proceeds will be used for general partnership purposes, including capital expenditures and repaying debt under NuStar’s revolving credit agreement.

The company plans to list the preferreds on the New York Stock Exchange under the symbol “NSPrC.”

NuStar is a San Antonio-based limited partnership and independent liquids terminal and pipeline operator.

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