Morning Commentary: Entergy Arkansas offers $25-par first mortgage bonds; Rexford deal upsized

By Stephanie N. Rotondo

Seattle, Aug. 9 – The preferred stock market’s new issue pipeline remained open on Tuesday as Entergy Arkansas Inc. announced plans to sell $25-par first mortgage bonds.

Additionally, Rexford Industrial Realty Inc. priced series A cumulative redeemable preferreds. The offering was announced on Monday.

The Entergy deal is being led by Wells Fargo Securities LLC and is being talked around 4.875%, according to a market source.

A trader said there was no selling group.

“It’s small,” he said of the proposed $200 million offering. “The coupon is a little rich for my blood.”

He saw the issue at $24.80 bid in the early gray market.

Meanwhile, Rexford came with $90 million of 5.875% cumulative redeemable preferreds.

When the transaction was first announced on Monday, price talk was 6% and the size was slated to be $75 million.

BofA Merrill Lynch and Wells Fargo led the sale.

A trader said the paper was bid at $24.90 at mid-morning.

The Los Angeles-based real estate investment trust will contribute proceeds to the operating partnership in exchange for series A preferred units. The operating partnership will then use the funds for potential acquisitions and for general corporate purposes.

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