Bank of America taps market; Energy Transfer’s new issue below par; Citigroup slides

By James McCandless

San Antonio, July 17 – The preferred primary space saw new issues for the first time in a few weeks as the secondary market saw more declines on Tuesday.

Bank of America Corp. sold $854 million of $25-par series HH non-cumulative perpetual preferred stock with a 5.875% dividend at the tight end of talk and larger than the $250 million originally expected.

The company’s older series GG preferreds continued to slide in the secondary market.

Meanwhile, Energy Transfer Partners, LP’s new $400 million 7.625% series D fixed-to-floating rate cumulative redeemable perpetual preferred units were seen trading below par as the market closed.

Citigroup Inc.’s 7.875% fixed-to-floating rate trust preferred securities declined.

Bank of America prices

Bank of America sold $854 million of $25-par series HH non-cumulative perpetual preferred stock at the tight end of talk, which called for a dividend of 5.875% to 6%, market sources said.

BofA Merrill Lynch is the bookrunner. Morgan Stanley & Co. LLC, UBS Securities LLC, Wells Fargo Securities LLC and RBC Capital Markets, LLC are also in the syndicate (see related story elsewhere in this issue).

In the secondary space, the company’s 6% series GG non-cumulative preferred stock continued to decline.

The series GG preferreds (NYSE: BACPrB) were down 25 cents to $25.88 with about 1,045,000 shares trading.

On Monday, the preferreds lost 26 cents.

Energy Transfer below par

Meanwhile, Energy Transfer Partners’ new $400 million issue of 7.625% series D fixed-to-floating rate cumulative redeemable perpetual preferred units ended Tuesday below par.

The deal was priced on Monday.

The preferreds, trading under the temporary ticker “ETPZF,” were spotted at $24.85 at market close on volume of about 7,612,000 shares for the day.

In the secondary market, the company’s existing 7.375% series C fixed-to-floating rate cumulative redeemable perpetual preferred units declined again.

The series C preferreds (NYSE: ETPPrC) were down 18 cents to close at $24.82 with about 642,000 shares trading.

On Monday, the preferreds were down 35 cents.

Citigroup down

Citigroup’s 7.875% fixed-to-floating rate trust preferred securities also declined at market close on Tuesday.

The preferreds (NYSE: CPrN) were down 14 cents to close at $27.05 with about 371,000 shares trading.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.27% at market close, almost doubling the 0.14% decrease in early trading on Tuesday.

The iShares US Preferred Stock ETF was down 6 cents to $37.54.

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