Prudential Financial (PRU) will sell a new issue of $25 baby bonds.
The Junior Subordinated Notes will have a maturity date in 2060 and a optional redemption date of 9/1/2025.
The company currently has 3 other baby bonds outstanding, 2 of which are currently optionally redeemable. CORRECTED–the company intends to call the 2 redeemable issues (thanks Jag).
The S&P500 traded in a range of 3326 to 3379 before closing the week at 3373–there was a gain of a bit less than 1% on the week.
The 10 year treasury yield traded in a range of .55% to .72% before closing at .71%–the highest weekly close since June 5.
The Fed Balance Sheet grew by $12 billion last week–the 1st increase in 3 weeks. With interest rates popping last week because of relatively massive supply from the treasury we may well see the balance sheet grow at a faster clip ahead–we will see if there is enough liquidity sloshing around to soak up the issuance.
After pausing 2 weeks from relentlessly upward movement the average $25/share preferred stock and baby bond moved higher again last week. The average issue moved 1% higher with lodging issues moving 3% higher, mREIT issues moving 3% higher while utilities moved just 1/2% higher. Investment grade issue just barely moved higher by less than 1/2%. Obviously the theme is junkier issues drove the week higher.
We had 3 new income issues sold last week.
US Cellular (USM) priced a new issue of baby bonds at 6.25%. The ticker will be UZD when the issue begins to trade (no OTC trading)–I note that eTrade has the ticker ‘set up’.
Self storage giant Public Storage (PSA) priced a new issue at the rock bottom coupon of 4.125%. In spite of the coupon the issue closed trading last week at $25.48–trading on the OTC market–ticker PSAGL (note the OTC ticker below is not correct–changed after publication.
Lastly Federal Agricultural Mortgage Corp (AGM) priced a new issue at 5.25%. The issue is trading on the OTC market under ticker AGMFP—closed trading last Friday at $25.02.
Federal Agricultural Mortgage Corp (AGM) has priced their previously announced new non-cumulative preferred.
The issue will carry a coupon of 5.25% and will be non-cumulative, but qualified.
The company also announced a call (although no official notice of call has yet been issued) of the 5.875% series a issues (AGM-A) which has been redeemable since 2018.
Holders of the AGM-A issue are sleeping a bit as shares closed at $25.80 today–with 30 days notice of redemption holders will likely take about a 50-55 cent loss. My guess is the lack of information has left most holders in the dark.
There will be a SEC filing soon on the issue, but in the meantime the issue will begin trading immediately.
EarlyBird had the details on this issue at 1:22pm this afternoon in Reader Alerts. We always wait for published details before posting our announcement–watching the Reader Alerts page is always most timely.
Federal Agricultural Mortgage Corp (also known as Farmer Mac) (AGM) will be selling a new non-cumulative preferred stock.
Few details are know on the new issue as of this moment as Farmer Mac doesn’t file with the SEC in the same manner as most companies. Farmer Mac was chartered by the federal government in 1987 and is regulated by the Farm Credit Administration–thus they follow rules that different from the run of the mill company.
Farmer Mac has 4 other preferred stock issues outstanding which can be seen here. The outstanding issues have coupons ranging from 5.70% to 6% with the 6% issue being a fixed to floating rate.
We will post further details as they are known.
mbg chimed in that the new issue will trade with the OTC ticker of AGMFP (always subject to change before trading begins).
EarlyBird was on this issue at 9 am this morning with Potter jumping a bit later. Yield talk is in the 5.375% to 5.50% area.
2whiteroses mentioned that he/she is unable to find prospectuses for the Farmer Mac issue. If you go to the individual security page on this site we have the link to the Certificate of Designation of Terms and Conditions for each issue.
Public Storage (PSA) has priced their new preferred stock issue at the rock bottom low coupon of 4.125%. They will be selling 8 million shares with another 1.2 million available for over allotment.
With this coupon the redemption of the PSA-X is most likely to occur as it is exactly the same number of shares–PSA-W will live on.
It will be interesting to see how this coupon trades–I predict it will trade around $25.25 after a week.
The company did not announce a specific redemption of preferred shares with proceeds, but a potential redemption is mentioned in the ‘use of proceeds’ section.
It looks like the PSA-X and PSA-W issues which are both 5.20% coupons are top candidates for redemption.
Midwest cellular company US Cellular (USM) has priced their previously announced baby bond issue.
The issue priced at 6.25% for 20 million shares (bonds).
The company has 3 issues currently outstanding and 2 of 3 are currently callable with coupons of 6.95% and 7.25%–they may call some of these issues with proceeds of this issue. Yesterday both issues traded lower with the call in mind. You can see these issues here.
The issue is rated a couple notches below investment grade.
There will be no OTC grey market trading in the issue, but if you want it badly call your brokers bond desk with the CUSIP.
The company has not indicated a redemption of outstanding issues definitively, but ‘use of proceeds’ may be for debt repayment. Investors should use caution as they have a 7.25% and 6.95% currently redeemable.
