Morning Commentary: Preferreds open higher; Deutsche Bank paper declines on restructuring plan

By Stephanie N. Rotondo

Phoenix, April 27 – The preferred stock market had a firm tone as the new trading week began.

The Wells Fargo Hybrid and Preferred Securities index was up 8 basis points at mid-morning.

Despite the overall market strength, Deutsche Bank AG’s preferreds were softer after the Frankfurt-based bank announced a restructuring plan that would cut €200 billion in assets from its investment banking portfolio.

The plan’s main goal was to target savings of up to €3.5 billion per year.

That news came on the heels of the bank’s earnings over the weekend. Deutsche reported a smaller profit for its first quarter, despite a 24% gain in revenue.

The smaller profit was attributed to legal expenses – such as the $2.5 billion fine levied last week over alleged interest rate manipulation.

The 6.55% trust preferreds (NYSE: DXB) came in a penny to $26.66, while the 7.6% TruPS dipped 2 cents to $28.32.

Looking toward the week’s primary calendar, a trader said there was “nothing new on the horizon” as of yet but that he hoped the pipeline would continue to churn out deals.

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