Stifel Financial launches, sells $25-par 5.375% senior notes; Phoenix's bonds take a dive

By Stephanie N. Rotondo

Phoenix, Dec. 18 - The primary preferred stock market was eking out deals as the year winds down.

"There is this feeling that if you are going to bring stuff, you want to do it now ahead of the fiscal cliff," the trader said. With interest rates being at their lows and optimism about the fiscal cliff being avoided - not to mention hope that dividend taxation won't be "too harsh" - issuers are in "a sweet spot," the trader remarked.

"Raise it now while you can at these levels because there is no certainty that you will be able to do it in the first quarter of next year," the trader said.

Still, overall activity was not immense.

"It's pretty quiet," a trader said. "Generally, lower coupon issues are softening with a drop in the Treasuries."

Another market source said the market spent most of the day of the downside, though in the last few minutes of trading, it edged up to end just barely firmer.

There was "very narrow range trading" throughout the day, the source said, adding that "volume is lightening."

Stifel Financial Corp. announced a sale of $25-par senior notes due Dec. 31, 2022 on Tuesday.

The deal priced at 5.375%, with $150 million notes being sold.

In the secondary arena, the Phoenix Co. Inc.'s preferreds were more active than usual following news the company's management was being investigated.

The investigation comes a month after the company said it would have to restate earnings for certain time periods. The probe will center on whether or not management purposefully released misguided statement.

Stifel's new deal

Stifel Financial announced and then priced a $150 million offering of 5.375% $25-par senior notes due 2022 on Tuesday.

"It's holding up pretty well," a trader said ahead of pricing, seeing a $24.90 bid, $24.94 offered market in the gray at midafternoon.

After pricing - which occurred shortly before the close - a trader quoted the notes at $24.90 bid, $24.95 offered.

Another source said the issue "technically closed" at par, though "most of the sizable trades" occurred between $24.91 and $24.92, he said.

Stifel is a St. Louis-based full-service retail and institutional brokerage and investment bank.

Managers lift bids, then pull

In other recent deals, SunTrust Banks Inc.'s $450 million of 5.875% series E noncumulative perpetual preferreds - which priced Thursday - were seen at $24.90 bid early in the session.

But a trader said it was manager bids that were keeping them higher and that the issue was losing ground as managers pulled their bids.

He said the last bid he saw for the paper was $24.81.

TCF Financial Corp.'s $100 million of 6.45% series B noncumulative perpetual preferreds were meantime at $24.90 bid.

"I think that was a managers bid again," the trader noted.

Phoenix bonds crash

Phoenix Cos.' 7.45% quarterly interest bonds due 2032 fell dramatically Tuesday following news the company was being investigated in regards to misstated earnings.

The notes (NYSE: PFX) dropped $1.52, or 6.45%, to $22.03 in very active trading.

Last month, the company reported that it would have to restate earnings for several periods and that its third-quarter financial statement would also be delayed. On Tuesday, a law firm - Bronstein, Gewirtx & Grossman LLC - said it was investigating whether management had knowingly reported the erroneous statements.

Late last week, the company itself sought an amendment on the 7.45% $25-par bonds in order to give itself more time to file the necessary documents, as required by the indenture.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.