Entergy Louisiana frees up; Forest City plans reopening; TCF lists; RBS getting checked out

By Stephanie N. Rotondo

Phoenix, June 27 - Liquidity was much improved in the preferred market on Wednesday, a market source reported.

"It was a very different day than yesterday," he said. "Much, much, much more active."

The source also added that it was a "mostly green day."

Entergy Louisiana LLC's newly priced $200 million offering of 5.25% $25-par first mortgage bonds due July 1, 2052 freed from the syndicate, a trader reported. The bonds were quickly trading above par.

"That thing has been on fire," a source said.

Also, Forest City Enterprises Inc. announced plans for an add-on to its $100 million of 7.375% senior notes due Feb. 1, 2034.

In other recent deals, TCF Financial Corp.'s $150 million of 7.5% series A noncumulative perpetual preferred stock officially listed on the New York Stock Exchange.

In the secondary space, Royal Bank of Scotland Group plc paper was trading actively and higher during the session. A market source opined that given all of the recent redemptions of trust preferreds, investors were looking to reinvest sooner rather than later.

Entergy frees from syndicate

Entergy Louisiana's new $200 million of 5.25% $25-par first mortgage bonds due July 1, 2052 freed to trade, a trader reported Wednesday.

The deal priced Tuesday, upsized and at the tight end of talk.

The notes were trading at $25.20 on the break.

"I don't know how much higher that's going to go," the trader said at midday.

After the market closed, a source said he had seen paper pre-bell at $25.24 bid, $25.29 offered. However, after-market trades were coming in at $25.16, he said.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunning managers. J.P. Morgan Securities LLC and Raymond James & Associates Inc. are the co-managers.

The company will apply to list the bonds on the NYSE. The issue is expected to settle Tuesday.

Proceeds will be used for general corporate purposes.

Entergy Louisiana is the Baton Rouge, La.-based energy-providing subsidiary of Entergy Corp.

Forest City plans add-on

Forest City Enterprises announced a reopening of its 7.375% senior notes due Feb. 1, 2034 in a regulatory filing on Wednesday.

The company originally issued $100 million of the notes on Feb. 10, 2004.

The $25-par bonds (NYSE: FCY) were trading down a nickel at $24.55.

Proceeds from the reopening will be used to redeem a portion of the company's 7.625% senior notes due June 1, 2015.

Morgan Stanley, Bank of America Merrill Lynch and Barclays Capital Inc. are the joint bookrunners. RBC Capital Markets LLC is the co-manager.

Forest City is a Cleveland-based real estate company.

TCF lands on NYSE

TCF Financial's $150 million of 7.5% series A noncumulative perpetual preferred stock listed on the NYSE Wednesday. The ticker symbol is "TCBPB."

The preferreds closed at $25.31.

The issue priced June 18.

Proceeds from the sale are being used to redeem the company's $115 million of 10.75% series I junior subordinated notes, a call that was officially announced on Monday. The issue will be redeemed July 30.

That issue (NYSE: TCBPA) was unchanged at $25.51.

TCF is a Wayzata, Minn.-based bank holding company for TCF National Bank.

Investors checking out RBS

A market source speculated that activity in Royal Bank of Scotland preferreds was either related to the fact that so-called "now-pays" are lagging significantly behind "must-pays" or that accounts were taking their money out of recently redeemed issues of trust preferreds and reinvesting "sooner rather than later."

Either way, the Edinburgh-based bank's preferred stock was gaining ground.

The 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) moved up 15 cents to $19.56, while the 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) gained 11 cents, closing at $17.68.

The 6.75% series Q noncumulative dollar preference shares (NYSE: RBSPQ) ended up 7 cents at $18.07.

Meanwhile, Citigroup Inc.'s 8.5% fixed-to-floating-rate trust preferreds (NYSE: CPJ) were trading heavily and slightly firmer.

The shares earned a penny, finishing around $25.071.

Citigroup was the first to announce a redemption of certain trust preferred securities after the Federal Reserve announced its new proposed rules on regulatory capital treatment.

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