Morning Commentary: Preferreds tick higher; Southern Co. offers $25-par notes; TravelCenters eyed

By Stephanie N. Rotondo

Phoenix, Oct. 1 – The preferred stock market was attempting to move up in the first trading session of the month.

The Wells Fargo Hybrid and Preferred Securities index was up 8 basis points at mid-morning.

Another new issue was added to the calendar as well, as the Southern Co. said it planned to sell $250 million of $25-par series 2015A junior subordinated notes due 2075.

Price talk is 6.25% to 6.375%.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. Co-managers are Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC.

A trader saw a less-23-cent bid, less-15-cent offer gray market early in the day.

“It’s being issued off of the Southern Co. instead of their subs, which is a little different than usual,” the trader said. “It looks like a good deal as long as they don’t tweak the price talk down too much.”

Meanwhile, TravelCenters of America LLC’s $100 million of 8% $25-par senior notes due 2030 – a deal priced Wednesday – was seen offered at $24.60.

A trader said there was no word on when the deal might free to trade.

Citigroup, Morgan Stanley, RBC Capital Markets LLC and UBS Securities ran the books.

As for the secondary market, a trader said there was not “much going on,” though he noted that “some of these beat up oil names are getting a little pop” as crude oil prices rallied nearly 4% in early trading.

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