Midday Commentary: Hanover Insurance heralds notes sale; Citigroup's new issue frees to trade

By Stephanie N. Rotondo

Phoenix, March 20 - The new preferred issue market showed no sign of letting up on Wednesday as yet another deal was announced.

The Hanover Insurance Group said that it was selling at least $100 million of subordinated notes due 2053.

Price talk is 6.375% to 6.5%, according to a trader.

"It seems to be doing pretty well," the trader said, seeing paper trade around $24.90 in the midday gray market.

Meanwhile, Citigroup Inc.'s new 5.8% series C noncumulative perpetual preferreds - a $500 million issue that priced Tuesday - freed up early in the day.

That issue was quoted at $24.90 bid, $24.95 offered.

In other recent deals, Taubman Centers Inc.'s $150 million issue of 6.25% series K cumulative redeemable preferreds listed on the New York Stock Exchange on Wednesday.

The deal priced March 11. The ticker symbol is "TCOPK."

The preferreds were trading at $24.88 at midday, down 4 cents from the previous close.

A trader speculated that the new issue arena would stay busy in the near future.

"We've seen more filings. It looks like we're going to have a busy new issue market," he said. He opined that certain banks such as Zions Bancorporation and JPMorgan Chase & Co. could soon be bringing deals.

But despite the active primary, the trader noted that overall action was "pretty quiet." He said he was not sure what was keeping investors on the sidelines.

"Maybe people are scared with the market; maybe they think it's getting too frothy," he said.

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