Entergy New Orleans sells $25-par first mortgage bonds; Huntington not free to trade

By Stephanie N. Rotondo

Seattle, March 15 – Entergy New Orleans Inc. kept the preferred stock market deal flow going on Tuesday, pricing a $110 million offering of 5.5% $25-par first mortgage bonds due 2066.

Price talk was initially around 5.625%, according to a market source, but was revised to 5.5%.

Post-pricing, a source saw the issue offered at $25.16. The source noted that the deal did well.

“But then again, utilities usually do,” he said, given there are so few utility issues in the preferred market. It also helped that the deal was on the smaller side, forcing investors to push up the price in order to get involved.

Earlier in the day, a trader saw the issue at $24.80 bid in the gray market.

“These are usually small deals,” the trader said at mid-morning, adding that pricing might be reworked if demand was there.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunners.

The company plans to use the proceeds to pay down debt.

Meanwhile, recently priced deals continued to keep investors busy.

Huntington Bancshares Inc.’s $350 million of 6.25% series D noncumulative perpetual preferreds freed around late morning, according to one source.

That source placed the issue at $24.89, flat day over day. The Columbus, Ohio-based bank’s new issue was also deemed the most active of the day, with over 4.2 million shares being exchanged.

A trader had pegged the issue at $24.65 bid, $24.72 offered in early trading.

The deal came Monday via BofA Merrill Lynch, Morgan Stanley, UBS Securities LLC and Wells Fargo.

From last week, KKR & Co. LP’s $300 million of 6.75% series A noncumulative perpetual preferred units were seen moving up, trading 7 cents higher at $24.95.

That deal came Thursday.

Priced March 8, AmTrust Financial Services Inc.’s $125 million of 7.75% series E noncumulative preferreds were trading around “$24.95-ish,” a trader said.

Secondary fizzles

As for the secondary, a source said that overall liquidity was “light-ish,” though not overly so.

The source also remarked that, on an index basis, the market took a “free-fall drop in the last minutes.” That resulted in the Wells Fargo Hybrid and Preferred Securities index ending down 35 basis points.

However, the source opined that the market was “legitimately” down only 25 bps.

Public Storage redemption

After the bell, Public Storage announced the redemption of all $375 million of its 6.5% series Q cumulative redeemable preferreds (NYSE: PSAPQ).

The preferreds were unchanged on the day at $25.17.

The redemption is scheduled for April 15 and will be at a redemption price of par plus accrued dividends from April 1 through the redemption date.

Public Storage is a Glendale, Calif.-based real estate investment trust focused on storage solutions.

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