Midday Commentary: Week's new issue supply expected to be heavy; Apollo, PREIT herald offerings

By Stephanie N. Rotondo

Phoenix, Oct. 1 - As the new month and final quarter of the year kicked off Monday, a preferred stock trader said he was hearing the week would be loaded with new issues.

Apollo Investment Corp. announced a proposed sale of $25-par senior notes due 2042.

A trader said at least $100 million of the notes would be marketed, with price initially talked between 6.625% and 6.75%. It was then revised to 6.5% to 6.625%.

The issue was trading at $24.63 in the gray market as of midday, the trader said.

"I heard retail was snapping it up," he said.

Pennsylvania Real Estate Investment Trust is also planning a preferred deal. It will sell series B cumulative redeemable perpetual preferred stock.

Price talk is 7.5% to 7.625%, according to a trader.

That paper was seen at $24.60 in the gray at midafternoon. A trader said there is no selling group on the deal.

CoBank ACB might also be coming out with a new issue, according to market sources, though there were few details to be found.

A call to the company had not been returned as of this writing.

The issue is expected to be a $100-par perpetual preferred, noncallable for 10 years. Price talk is said to be 6.5% to 6.75%.

The deal is reportedly coming via Bank of America Merrill Lynch and J.P. Morgan Securities LLC.

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