Preferreds up; Southern Co. prices 5.25% notes on tight side of talk; Two Harbors flat

By Cristal Cody

Tupelo, Miss., Nov. 17 – The Southern Co. brought $450 million of 5.25% $25-par series 2017B junior subordinated notes due Dec. 1, 2077 to the primary market on Friday.

Pricing action in the preferred stock market has been steady over the week with deals from issuers including Two Harbors Investment Corp., MB Financial, Inc. and Ladenburg Thalmann Financial Services Inc.

NuStar Energy LP also announced plans earlier in the week to price series C fixed-to-floating rate cumulative redeemable perpetual preferred units.

Preferreds ended Friday stronger.

The Wells Fargo Hybrid and Preferred Securities index jumped 58 basis points.

The U.S. iShares Preferred Stock ETF rose 31 bps.

Two Harbors Investment’s $275 million of 7.25% series C fixed-to-floating rate cumulative redeemable preferred stock that priced on Thursday was freed to trade on Friday under the temporary symbol “TWWHP.”

The preferreds ended flat at $25.00.

Two Harbors plans to apply to list the securities on the New York Stock Exchange under the symbol “TWOPrC.”

In other trading on Friday, Wells Fargo & Co.’s 8% series J non-cumulative perpetual class A preferred shares (NYSE: WFCPrJ) closed 6 cents better at $26.04.

The preferreds went out on Thursday up 37 cents, or 1.44%, at $25.98 in heavy trading after investors realized the securities would not be called on its first optional call date, a market source said. The preferreds have a call date of Dec. 15, 2017.

Southern sells $450 million

Southern priced $450 million of 5.25% $25-par series 2017B junior subordinated notes due Dec. 1, 2077 (Baa3/BBB/BBB) on Friday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The notes priced on the tight side of initial talk in the 5.25% to 5.375% area.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC were the bookrunners.

There will not be an over-allotment option.

The new securities will be listed on the NYSE.

Proceeds will be used to pay a portion of outstanding short-term debt and for other general corporate purposes, including investments in subsidiaries.

Southern is an Atlanta-based electric utility company.

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