Midday Commentary: Preferreds remain firm; primary quiets down; Diana said to have freed up

By Stephanie N. Rotondo

Phoenix, Feb. 11 - Preferred stocks were again ticking higher in Tuesday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points as of mid-morning.

There were no new issues announced, however, and one trader said he had yet to hear of any planned deals for the rest of the week.

"It just seems like the lower quality stuff is coming out, and it's not getting snapped up," he said, speculating that perhaps yields were not attractive enough to investors. "With rates at these levels, we should see stuff coming. It's a pretty cheap environment to raise money."

Among recently priced deals, Diana Shipping Inc.'s $60 million of 8.875% series B cumulative redeemable preferreds were seen at $24.55 bid early in the day.

A trader said he believed the issue had already freed to trade.

It was a small deal, he said, noting "there's not a lot of attention being paid to it."

Diana Shipping priced on Monday.

Also in the shipping space, Seaspan Corp.'s $125 million of 8.25% series E cumulative redeemable preferreds were pegged at $24.80.

That issue came on Thursday.

In larger, rated deals, Citigroup Inc.'s $480 million of 6.875% series L noncumulative perpetual preferreds - a deal that priced Wednesday - were trading around $24.68, while Verizon Communications Inc.'s $500 million of 5.9% $25-par notes due 2054 were quoted at $24.80 bid, $24.88 offered.

Verizon priced Jan. 30.

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