BofA deal prices tight, upsizes; Citigroup sells $1,000-pars; Morgan Stanley slips

By Stephanie N. Rotondo

Seattle, April 18 – The preferred stock primary market started to pick up on Monday as Bank of America Corp. and Citigroup Inc. both announced deals.

For its part, BofA said it was selling series EE noncumulative perpetual preferreds via BofA Merrill Lynch.

Price talk was around 6.125%, according to a trader, though he remarked that it would probably come in around 6%, “because of the demand on it.” His speculation later proved to be accurate, as the issue priced at 6%.

Citigroup meantime said it was planning to sell $1,000-par series T fixed-to-floating rate noncumulative preferreds.

A trader put price talk at 6.5%.

“They will ratchet that back too,” he said. Given that the 5.8% $1,000-par series N fixed-to-floating rate noncumulative preferreds were trading in a 96 to 97 context, “that’s a good indication that the Street expects them to tighten this deal.”

Pricing was in fact ratcheted down, to 6.25%.

Citigroup Global Markets Inc. ran the deal.

Away from new issues, Morgan Stanley & Co. Inc. announced its first-quarter results on Monday. While profit declined over 50% year over year, the earnings still beat expectations.

The bank’s preferreds, however, did not react positively.

Also in the news, Gulf Power Co. said it was calling all $125 million of its 5.75% series 2011A senior notes due 2051.

“That’s kind of interesting, as it’s only a 5.75% coupon,” a trader said.

The notes traded on Friday at $25.85.

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