Morning Commentary: CorEnergy plans new issue; Harvest expected to price; Del Monte on hold

By Stephanie N. Rotondo

Phoenix, Jan. 22 – There continued to be signs of life in the primary preferred stock market on Thursday.

CorEnergy Infrastructure Trust Inc. announced plans to sell $50 million of series A cumulative redeemable preferred stock.

The deal is being led by Wells Fargo Securities LLC and BofA Merrill Lynch.

However, a trader said he had not seen any details on the small issue.

Late Wednesday, Harvest Capital Credit Corp. said it was selling $25 million of $25-par notes due 2020.

Come Thursday, a trader said pricing on the “tiny deal” was expected by the end of the day.

Price talk was 7%, he said, adding that he had not yet seen any markets.

The pipeline was lighter by one deal, however, as Del Monte Pacific Ltd. said it had nixed its planned $360 million offering of preference shares – at least for the time being.

The company cited current market conditions as its reason for putting the new issue on hold. The deal could be back on the table once conditions improve.

Among deals that have already priced, Bank of America Corp.’s $1 billion of 6.5% series Y noncumulative perpetual preferreds was assigned a temporary reporting symbol, according to a trader.

The temporary ticker is “BKMRP.” The deal came Tuesday and freed to trade late Wednesday.

At mid-morning, the issue was trading at $24.89, up from opening levels of $24.85.

CHS Inc.’s $450 million of 7.5% class B series 4 cumulative redeemable preferreds – a deal priced Jan. 13 – meantime listed on the Nasdaq Global Market under the ticker “CHSCL.”

That issue was at $25.75 in early trades, down from $25.79 at the open.

In the secondary market, City National Corp.’s preferreds were “all jumping,” a trader said, on news the Los Angeles-based “bank to the stars” was being bought by Royal Bank of Canada for $5.4 billion.

The 5.5% series C noncumulative perpetual preferreds (NYSE: CYNPC) were up 52 cents, or 2.78%, at $24.38 early in the session. The 6.75% series D fixed-to-floating rate noncumulative preferreds (NYSE: CYNPD) were up 71 cents, or 2.55%, at $28.55.

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