Morning Commentary: U.S. Bancorp plans benchmark $1,000-par deal; Vanguard in bankruptcy

By Stephanie N. Rotondo

Seattle, Feb. 2 – Rumors of a possible new deal for Thursday proved true, as U.S. Bancorp announced a benchmark offering of $1,000-par series J fixed-to-floating rate noncumulative preferreds.

A trader said he was hearing price talk around 5.625%.

“But we’ll see,” he remarked. “That seems pretty cheap.”

He speculated that talk could be revised closer to 5.5%, with actual pricing coming around 5.45%.

The trader said there were no gray markets in early dealings.

U.S. Bancorp Investments Inc., Barclays and Morgan Stanley & Co. LLC are running the books.

The bank said proceeds will be used for general corporate purposes, which may include the redemption of the 6% series G fixed-to-floating rate noncumulative preferred stock (NYSE: USBPrN).

That issue was down 2 cents at $25.37 at mid-morning.

Meanwhile, Vanguard Natural Resources LLC said it had filed for bankruptcy protections on Thursday.

“Not that it wasn’t expected,” a trader commented.

Still, the oil and gas company’s preferred units were getting knocked down.

The 7.625% series B cumulative redeemable preferred units (Nadaq: VNRBP) were down $1.41, or 35.25%, at $2.59 at mid-morning. The 7.75% series C cumulative redeemable preferred units (Nasdaq: VNRCP) were off $1.49, or 37.44%, to $2.49.

And, the 7.875% series A cumulative redeemable preferred units (Nasdaq: VNRAP) slipped $1.61, or 32.62%, to $3.33.

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