DTE Energy comes with upsized sale of $25-par debentures; Fannie Freddie firm again

By Stephanie N. Rotondo

Seattle, May 23 – The preferred stock new issue pipeline continued to flow on Monday following the previous week’s steady stream of deals.

DTE Energy Co. brought a $300 million offering of 5.375% $25-par 2016 series B junior subordinated debentures due June 1, 2076 (Baa1/BBB-/BBB-).

Price talk was around 5.5%. The deal came upsized from $150 million.

A trader said there was no selling group.

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC led the deal.

Proceeds will be used to repay the $300 million of 6.35% 2006 series B senior notes due June 1, 2016 and for general corporate purposes.

As for last week’s deals, W.R. Berkley Corp.’s $290 million of 5.75% $25-par subordinated debentures due 2056 – a deal priced Wednesday – were holding around $24.95, according to a trader.

Fannie Mae and Freddie Mac continued to be in focus on Monday as investors digested news from last week regarding stakeholders’ lawsuits against the federal government.

The market also continued to take the news as a positive for preferred holders, as paper remained on an upward track.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) added a nickel, or 1.21%, to close at $4.19. Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) gained 7 cents, or 1.75%, to close at $4.08.

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