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Midday Commentary: Regions launches new deal; Citigroup frees to trade; Goldman over par
By Stephanie N. Rotondo
Phoenix, April 24 - Yet another new deal was added to the preferred stock calendar Thursday.
Regions Financial Corp. announced the sale of at least $500 million series B fixed-to-floating rate noncumulative perpetual preferreds, confirming talk circulating in the market on Wednesday that the Birmingham, Ala.-based bank was bringing a deal.
Price talk is 6.375% to 6.5%, a trader said.
"I think that's a little rich for the rating," he said.
The trader also noted that there was no selling group.
He saw the paper trading around $24.90 in the gray market.
Goldman Sachs & Co. Deutsche Bank Securities Inc., JPMorgan Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunning managers.
As for other deals from the week, Citigroup Inc. released details on its offering of $1.75 billion 6.3% $1,000-par series M fixed-to-floating rate noncumulative preferreds.
The deal priced late Wednesday.
A trader said the issue had freed to trade by mid-morning and pegged the preferreds at 99.75.
Dividends will be paid at a fixed rate on a semi-annual basis until May 15, 2024, at which time the securities will begin floating at Libor plus 342.3 basis points.
Once floating, the dividend will be payable on a quarterly basis.
Citigroup Global Markets Inc. was the bookrunner.
Meanwhile, Morgan Stanley & Co. Inc.'s $500 million of 6.625% $25-par series G noncumulative perpetual preferred stock - a deal that priced and freed on Tuesday - was trading at $24.98 bid, par offered, according to a trader. Goldman Sachs Group Inc.'s $700 million issue of 6.375% $25-par series K fixed-to-floating rate noncumulative preferreds were seen at $25.15.
Goldman's preferreds priced on Monday.
Generally, preferreds were modestly higher early in the session. The Wells Fargo Hybrid and Preferred Securities Index was up 3 bps.
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