Preferreds start firm, give back some gains after Fed minutes released; Citigroup lists

By Stephanie N. Rotondo

Phoenix, Feb. 19 - Preferred stocks were moving higher early Wednesday ahead of the release of minutes from the latest Federal Reserve meeting.

The Wells Fargo Hybrid and Preferred Securities index was up 24 basis points shortly before noon. However, a market source said that from around lunchtime on, the market "started to fade," following the trend of the treasury market.

"It was still up for the day," he noted, as the Wells Fargo index closed up 14 bps.

Later in the afternoon, the Fed minutes came out. According to the report, the central bank remained on track to gradually taper its bond-buying program, continuing its most recent course of action.

Citigroup Inc.'s $480 million of 6.875% series L noncumulative perpetual preferreds listed on the New York Stock Exchange Wednesday.

The deal priced Feb. 5. The ticker symbol is "CPL."

The issue was trading at $24.90 around midday, which was steady from the previous day's close. At the bell, the paper was up 2 cents at $24.92.

In the meantime, Citi's 6.875% series K fixed-to-floating rate noncumulative preferreds (NYSE: CPK) were trading neck and neck with the recent issue, rising 2 cents to $25.78 as of midday. By the day's close, the Ks had far surpassed trading in the newly listed Ls, with the shares closing at $25.80, up 4 cents.

Just over 655,000 shares of the Ls changed hands, while about 930,000 shares of the Ks traded.

Among other recent deals, Verizon Communications Inc.'s $500 million of 5.9% $25-par notes due 2054 "still are not listed," a trader said.

The deal came Jan. 30.

However, the trader said the paper "turned up a little bit," quoting the notes at $24.90 bid, $24.95 offered.

And, there was still no word on CHS Inc.'s planned offering of up to $250 million series 2 class B cumulative redeemable preferreds. The agricultural company said last week that it had registered the shares, which will be sold via BofA Merrill Lynch and Wells Fargo Securities LLC.

"It's probably not likely to be this week," a source speculated. As to when it could come, he was unsure.

Financials mostly firm

Financials dominated trading among paying securities on Wednesday.

Morgan Stanley & Co. Inc.'s 6.875% series F fixed-to-floating rate noncumulative preferreds (NYSE: MSPF) finished the session up a dime at $25.90 on over 1 million shares trading. JPMorgan Chase & Co.'s 6.7% series T noncumulative preferreds (NYSE: JPMPB) saw about 887,000 shares trade, falling 6 cents to $24.96.

HSBC USA Inc.'s floating-rate series F noncumulative preferreds (NYSE: HUSIPF) moved up 14 cents to $20.20 on trading of about 837,000 shares.

Away from financials, American Realty Capital Properties Inc.'s 6.7% series F cumulative redeemable preferreds (Nasdaq: ARCPP) continued to be actively traded, with about 733,000 shares moving about. The paper closed the day at $22.23, up 7 cents.

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