Midday Commentary: Scorpio Tankers plans deal; American Capital not yet freed; Morgan Stanley busy

By Stephanie N. Rotondo

Phoenix, May 6 - The preferred stock market continued to be firm Tuesday, though marginally so as of early trading.

The Wells Fargo Hybrid and Preferred Securities index was up 1 basis point as of mid-morning.

A trader said it was "pretty quiet, no news of new deals."

Scorpio Tankers Inc. did launch an offering of $25-par senior unsecured notes due 2020. However, the trader did not seem enthused about the new issue.

"I don't have anybody that would touch it," he said. "We're seeing a lot of weird names come out of the woodwork right now."

Stifel Nicolaus & Co., Deutsche Bank Securities Inc. and Jefferies LLC are the joint bookrunning managers. Co-managers are BB&T Capital Markets, Janney Montgomery Scott and Wunderlich Securities Inc.

The Monaco-based oil tanker business will use the proceeds for general corporate purposes, including working capital.

Meanwhile, American Capital Agency Corp.'s issue of 7.75% series B cumulative redeemable preferreds - a deal that came late Monday - was seen at $24.65 bid, $24.75 offered.

The offering was upsized to $175 million from $100 million and came at the tight end of talk.

A trader said it had not yet freed to trade as of mid-morning.

Joint bookrunners were Morgan Stanley & Co. LLC and UBS Securities LLC. Citigroup Global Markets Inc., Deutsche Bank and RBC Capital Markets acted as joint lead managers.

In the secondary market, volume was on the light side, with the exception of a handful of issues, including Morgan Stanley's $500 million of 6.625% $25-par series G noncumulative perpetual preferred stock (NYSE: MSPG).

The paper was trading at $25.05, off 3 cents in early trades, and well over 900,000 shares had already traded.

The deal priced April 22.

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