Preferreds hold gains as Fed keeps rates steady; Citigroup frees; Qwest inches toward par

By Stephanie N. Rotondo

Seattle, Jan. 27 – The preferred stock market ticked up on Wednesday as the Federal Reserve released its latest statement.

While preferreds bucked the overall trend of the day – the common equity market got trounced – a market source noted that the space lost a few steps after the central bank said it was keeping rates steady for the time being.

“Volume was light, which isn’t a surprise,” the source added. “It’s pretty common” ahead of big news, such as the Fed, for investors to hold back.

The Wells Fargo Hybrid and Preferred Securities index ended 24 basis points higher.

No new deals were announced on Wednesday, though recent new issues continued to be in focus.

Citigroup Inc.’s $900 million of 6.3% series S noncumulative preferreds – a deal priced Tuesday – freed to trade, according to a source.

The source saw the issue closing at $24.90. Earlier in the session, a trader quoted the preferreds at $24.82 bid, $24.87 offered.

As for Qwest Corp.’s $235 million of 7% $25-par notes due 2056 – a deal priced Monday and freed on Tuesday – they were pegged at $24.85 bid, $24.92 offered at midday.

At the close, a source said the notes were at $25.40, a level he didn’t find very accurate. He said the volume weighted average price of $24.88 “makes more sense.”

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