United States Cellular deal doubles, prices tight; U.S Bancorp brings $1,000-par issue

By Stephanie N. Rotondo

Seattle, Nov. 16 – The preferred stock market was kicking off the week by adding two new deals to the pipeline, both of which later priced.

In the $25-par space, United States Cellular Corp. announced plans to sell at least $150 million of senior unsecured notes due 2064. The deal came upsized at $300 million to yield 7.25%, the tight end of talk.

Price talk was 7.25% to 7.375%, according to a market source.

After pricing, the issue was seen at $24.85 bid, $24.87 offered.

Meanwhile, U.S. Bancorp added to the $1,000-par space with its planned offering of series I fixed-to-floating rate noncumulative perpetual preferreds.

The Minneapolis-based bank sold $750 million of the preferreds at par to yield 5.125%. Initial price talk was 5.125% to 5.25%.

Overall, it was a “rough day” for the secondary preferred stock market, a market source said.

The Wells Fargo Hybrid and Preferred Securities index dropped 19 basis points in Monday trading, despite the fact that the broader markets recovered from their early losses to end in positive territory.

The source opined that the preferred market’s weakness was merely due to a muted reaction.

“There is such a strong retail presence in the $25-par market, it could just be [that investors] were slow to react,” the source said.

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