Preferreds come off recent highs; Kemper's $25-par notes list on NYSE; called issues busy

By Stephanie N. Rotondo

Phoenix, March 3 - Preferred stocks were slipping in early Monday trading following the path of the common equity market.

For its part, the Wells Fargo Hybrid and Preferred Securities index was off 5 basis points as of midday. By comparison, the Dow Jones industrial average was down 1% on concerns relating to the Ukraine and Russia.

At the close, the Wells Fargo index was down 7 bps and the Dow had lost just under 1%.

But one trader opined that the preferred market's dip was more due to the fact that the space has been on the rise of late.

"We've had such a good run up, it'd be expected [that the market] would take a little breather," he said.

Another market source noted that there was "not a lot of volume" during the first trading day of the week. He pointed to concerns surrounding the Ukrainian situation as the cause for the lack of liquidity.

Kemper Corp.'s $150 million of 7.375% $25-par notes due 2054 were admitted to the New York Stock Exchange on Monday.

The deal priced Feb. 20. The ticker symbol is "KMPA."

The preferreds finished the session at $25.45.

As for other recently priced deals that have yet to list, State Street Corp.'s $750 million of 5.9% series D fixed-to-floating rate noncumulative preferreds were coming in, with a trader seeing the issue at $25.35 bid.

"They had been sliding down most of the day; then they popped at the end of the day," a market source noted of the issue. He opined that short covering could be responsible for the late-day improvement.

The source deemed the preferreds unchanged at $25.40.

The Allstate Corp.'s $650 million of 6.625% series E fixed-rate noncumulative preferreds were meantime pegged at $24.78 bid, $24.84 offered. A source said after the bell that the issue topped the day's trading session, with well over 1 million shares being exchanged.

The source placed the issue at $24.87, up 7 cents on the day.

State Street came Feb. 25. Allstate priced Feb. 24.

Called issues active

A source said that Ally Financial Inc.'s old GMAC LLC-linked 7.375% $25-par notes due 2044 were active but flat in Monday trading.

He pegged the notes at $25.43.

On Feb. 12, the company called the notes for March 14. Holders will receive par plus just over 45 cents per share.

Also busy were Deutsche Bank Inc.'s 7.35% noncumulative trust preferred securities. That issue closed down slightly at $25.45.

Deutsche called the preferreds on Feb. 11 for March 17. The securities are being called as they no longer qualify as Tier 1 capital.

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