Morning Commentary: Preferreds improve; Southern Co.’s new 6.25% $25-par notes free to trade

By Stephanie N. Rotondo

Phoenix, Oct. 5 – The preferred stock market was moving up in early Monday trading as investors shook off concerns about the Federal Reserve’s looming interest rate increase.

The Wells Fargo Hybrid and Preferred Securities index was up 19 basis points at mid-morning.

In September, the central bank chose to keep rates steady amid global economic concerns. Since then, the markets have been volatile as uncertainty reigned. But a weak jobs report last week – which showed a second month of less-than-expected job growth – has many speculating that the rate hike won’t occur until 2016.

As such, uncertainty has given way to confidence that rates will stay steady for longer.

Meanwhile, a trader said the Southern Co.’s $875 million of 6.25% $25-par series 2015A junior subordinated notes due 2075 – a deal that came Thursday – freed to trade early in Monday’s session.

He pegged the notes at $24.87 bid, $24.90 offered.

The deal came massively upsized from $250 million and at the tight end of 6.25% to 6.375% price talk.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC led the offering.

Also from last week’s business, TravelCenters of America LLC’s $100 million of 8% $25-par senior notes due 2030 – a deal priced Wednesday – were seen bid for at $24.65.

Citigroup Global Markets Inc., Morgan Stanley, RBC Capital Markets LLC and UBS Securities ran those books.

© 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.