Preferred stocks finish with strong tone; August’s new issues in focus; banks trade mixed

By Stephanie N. Rotondo

Seattle, Sept. 2 – The preferred stock market was looking to end the week on a high note, despite the limited liquidity that plagued the space.

The Wells Fargo Hybrid and Preferred Securities index closed 11 basis points higher after being up 5 bps at mid-morning.

As has been the case all week, the end of August combined with the end of summer weighed on trading activity. Of those issues that were moving about, deals priced in August remained in focus.

Legg Mason Global Asset Management’s $500 million of 5.45% $25-par junior subordinated notes due Sept. 15, 2056 (NYSE: LMHB) – priced Aug. 3 – were trying to regain the ground lost in the previous session, rising 3 cents by mid-morning to $25.10. However, the issue ultimately gave up those gains, ending unchanged at $25.07.

The paper had declined 9 cents in Thursday trading, following in line with the modestly weaker tone of the day.

Qwest Corp.’s $977.5 million of 6.5% $25-par notes due 2026 (NYSE: CTBB) – consisting of $850 million sold on Aug. 11 and a fully exercised greenshoe of $127.5 million – were meantime 2 cents better at $25.99, though at the open, paper was trading at $26.02.

Away from recent deals, Morgan Stanley & Co. Inc.’s 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI) were off 17 cents to $28.35.

Deutsche Bank AG’s 7.6% trust preferred securities (NYSE: DTK) traded up with the market, rising 22 cents, to $26.13.

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