First Horizon prices new noncumulative deal; SoCal Edison's new issue frees; PNC paper off

By Stephanie N. Rotondo

Phoenix, Jan. 24 - The preferred stock market was again on the soft side on Thursday and liquidity was "kind of on the light side," a market source said.

"But it's been worse," he said.

Yet another new issue entered the preferred stock market on Thursday.

First Horizon National Corp., a Memphis-based bank holding company, said it would sell at least $100 million of series A noncumulative perpetual preferreds. The deal priced after the close, coming at par to yield 6.2%.

Meanwhile, Southern California Edison Co.'s SCE Trust II linked 5.1% trust preference shares - a $500 million deal that priced Wednesday - freed from the syndicate in the afternoon. The issue was starting to gain some traction, according to sources.

In the secondary arena, PNC Financial Services Group Inc.'s 6.125% fixed-to-floating rate preferreds were seen weakening significantly. A source speculated the declines were due to a new bond deal that came earlier in the week.

First Horizon prices

First Horizon National sold $100 million of 6.2% series A noncumulative perpetual preferreds on Thursday.

Pricing was in line with the 6.25% talk.

The trader saw a $24.72 bid for the paper in the gray market at midday.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Goldman Sachs & Co. are the joint bookrunners.

Proceeds will be used for general corporate purposes.

SoCal new issue frees

Southern California Edison's SCE Trust II-linked 5.1% trust preference shares freed to trade around 1 p.m. ET on Thursday, according to a market source.

The $500 million issue priced Wednesday.

At midday, a trader saw the issue trading around $24.80. After the close, a source quoted the paper at $24.80 bid, $24.85 offered.

"So it's cleaning up a little bit," he said.

Meanwhile, the SCE Trust I-linked 5.625% trust preference shares (NYSE: SCEPF) were dominating trading, with over 1.08 million shares changing hands.

The issue closed at $26.17, down a penny.

PNC falls after bond sale

PNC Financial Services' 6.125% fixed-to-floating rate series P noncumulative perpetual preferreds (NYSE: PNCPP) dropped 22 cents in Thursday trading, ending at $27.60.

The dip came just one day after the company priced $1.75 billion of new fixed- and floating rate debt.

Proceeds will be used for general corporate purposes.

EDF takes focus

Electricite de France SA priced a $3 billion offering of 5.25% perpetual hybrid subordinated notes on Thursday to yield 5.375%, an informed source told Prospect News.

Pricing was at 99.043 with a spread of Treasuries plus 351 basis points.

"It took a lot of the attention," a market source said of the deal. He quoted the $1,000-par issue at 99 3/8 bid, 99 5/8 offered, which was up 20 bps from the discounted original sale price. "So obviously it's done well."

The notes have a coupon that will reset every 10 years. There is a fixed rate of 5.25% prior to the first call opportunity on Jan. 29, 2023, and then from and including the first reset date to Jan. 29, 2043, a rate of 3.709% or from and including the 2043 step-up date, 4.459%.

EDF priced a similar euro-denominated offering of notes.

The main electricity generation and distribution company in France is based in Paris.

Andrea Heisinger contributed to this article.

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