Prudential's $25-par notes free up at midday; AIG calls notes in effort to reduce overall debt

By Stephanie N. Rotondo

Phoenix, March 8 - A preferred stock trader said there was "no word of any new issues" on Friday.

Prudential Financial Inc.'s $650 million of 5.7% $25-par junior subordinated notes due 2053 were gearing up to free at 1 p.m. ET, he said.

The issue priced late Thursday, coming upsized from $250 million.

The trader said the last trade was at $24.87, leaving the market $24.85 bid, $24.90 offered, as of midday.

After the close, a market source confirmed that the notes had freed up as of 1 p.m. ET. He also quoted the paper at $24.85 bid, $24.90 offered.

American International Group Inc. announced late Thursday that it will redeem all $1.1 billion of its 7.7% $25-par series A-5 junior subordinated notes due 2047 (NYSE: AVF) on March 18.

"That's a good sign that they are getting stronger," a trader commented. The New York-based financial services firm was hit hard in the financial downturn and took billions of taxpayer dollars in order to stay afloat. Though all of that debt was repaid in December, the company still wants to lower debt before turning dividends back on.

But the notes were on the weaker side come Friday trading. The issue was off 46 cents, or 1.77%, at $25.46.

The redemption price is par plus accrued interest.

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