Huntington Bancshares taps market; more deals expected; new preferreds stay active

By Stephanie N. Rotondo

Seattle, March 14 – The preferred stock market’s recent stream of new deals continued on Monday with a $350 million sale of 6.25% series D noncumulative perpetual preferreds from Huntington Bancshares Inc.

The preferreds priced on top of price talk.

A source said the issue was trading around $24.65 bid, $24.75 offered in the gray market for most of the day.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are leading the DRD-eligible deal.

Meanwhile, recently priced issues continued to be in focus, according to a trader.

“Everything that has recently been issued is holding up pretty well,” he said.

KKR & Co. LP’s $300 million of 6.75% series A noncumulative perpetual preferred units, for instance, were trading “in fairly decent size” at $24.85, a trader said at mid-morning.

“Must be the manager,” he added.

At the close, a source said the issue dominated overall trading, with over 1.1 million shares being exchanged.

He deemed the issue up 8 cents at $24.88.

That issue came Thursday, upsized from $150 million and in line with the 6.75% price talk.

STAG Industrial Inc.’s $75 million of 6.875% series C cumulative redeemable preferreds – another deal priced Thursday – were pegged at $24.95 bid.

From Tuesday’s business, AmTrust Financial Services Inc.’s $125 million of 7.75% series E noncumulative preferreds were quoted at $24.92 bid, $24.95 offered.

And, Legg Mason Inc.’s $250 million of 6.375% $25-par junior subordinated notes due March 15, 2056 – priced March 7 – were “just hovering right around par,” a trader reported.

However, another source said the notes closed at $24.96, off 6 cents. The deal was the second-biggest trader of the day, also with over 1.1 million shares trading.

Given the overall firm tone of the broader markets and the current “low yield environment,” the trader opined that the primary preferred space would continue to be active.

“I wouldn’t be surprised if we see more deals come,” he said.

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