Banc of California deal frees to trade; rumors circulate about another regional bank deal

By Stephanie N. Rotondo

Seattle, Feb. 2 – Preferred stocks were slightly soft in Tuesday trading.

“Things are off, but not by a lot,” a trader said.

The Wells Fargo Hybrid and Preferred Securities index ended off 5 basis points. However, the index was down as much as14 bps at mid-morning.

Banc of California Inc.’s 7% series E noncumulative perpetual preferreds – a deal priced Monday – closed flat at $24.84 on “a fair amount of trading,” according to a market source.

Earlier in the session, the preferreds were “still floating around” $24.75, a trader said.

The issue – which came via BofA Merrill Lynch and UBS Securities LLC –freed to trade by the afternoon.

The new securities came on the heels of rumors of a deal from a regional bank. On Tuesday, those same rumors were circulating.

“This was going to be an [investment grade] bank in the 5.5% area,” a trader said, “which makes me think BB&T or PNC.”

Still, he hadn’t seen anything announced as of mid-morning.

Meanwhile, other recently priced deals remained in focus, taking up the bulk of trading activity.

Citigroup Inc.’s 6.3% series S noncumulative preferreds finished at par for the day, a loss of 22 cents. Approximately 1.83 million shares were traded.

At mid-morning, the paper was trading “off a little bit” in a $25.05 to $25.12 context, a trader said.

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