Charles Schwab, Iberia new issues firm up in trading; Freddie, Fannie preferreds improve

By Stephanie N. Rotondo

Phoenix, Aug. 4 – The preferred stock market was firm as Tuesday trading got underway but gave up those gains by the end of the day.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning but closed off 1 bp.

One market source deemed the overall performance as “essentially flat.”

Among recent deals, the Charles Schwab Corp.’s $600 million of 6% series C noncumulative preferreds were trading actively, with just over 1 million shares being exchanged.

The issue ended the session off 3 cents at $25.20. Earlier in the day, a trader quoted the preferreds at $25.20 bid, $25.30 offered.

That deal came July 27 via BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC. The paper is slated to begin trading on the New York Stock Exchange on Wednesday.

The ticker symbol will be “SCHWPC.”

In secondary trading, Fannie Mae and Freddie Mac preferreds were “jumping up,” according to a trader, after Freddie reported “decent earnings.”

Meanwhile, Royal Bank of Scotland Group plc paper fell slightly after the U.K. government began selling its stake in the Edinburgh, Scotland-based bank.

Royal Bank of Scotland preferreds were active but weaker on Tuesday as the U.K. government sold off 5.4% of its stake in the bank.

The stake sale was done at a loss to taxpayers.

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