Preferred market ends week higher; primary quiet; Barclays weakens; ING announces call

By Stephanie N. Rotondo

Seattle, Feb. 10 – The preferred stock market was again mixed in early trading, though it finished with a modestly firm tone.

The Wells Fargo Hybrid and Preferred Securities index closed 3 basis points higher, though it was down 4 bps at mid-morning. By comparison, the U.S. iShares Preferred Stock index rose 8 bps, after being up 6 bps in early dealings.

A trader noted that Thursday’s snowstorm on the East Coast continued to be a factor in overall trading.

“A lot of people are still out,” he said.

The trader also remarked that there was buzz that a new issue had been planned for next week, but added that “I think it got pushed.”

The reason for the delay, he speculated, was that the new U.S. administration was talking about unveiling a tax plan.

“A lot of companies are waiting [to issue new paper] to see how it [the tax plan] effects them,” he said.

As such, he expects that the primary will remained muted in the near-term.

However, he also opined that redemptions might start popping up, following on the heels of Barclays Bank plc’s $1,375,000,000 call of its 7.1% series 3 noncumulative callable dollar preference shares.

The redemption – planned for March 15 – was announced late Thursday. The redemption price is $25.44375 per share.

In Friday trading, the issue (NYSE: BCSPrA) was off 49 cents, or 1.89%, at $25.42.

Late in the day, ING Groep NV announced that it, too, was redeeming a large issue, all $1.1 billion of its 7.2% $25-par perpetual debt securities (NYSE: INZ).

Ahead of that announcement, the paper was up 6 cents at $26.09.

Elsewhere in the secondary, it continued to be the Fannie Mae-Freddie Mac show.

However, the GSEs did not perform in line with one another, like they usually do.

Fannie’s variable-rate series O noncumulative preferreds (OTCBB: FNMFN), for instance, ended down 13 cents at $18.80, while the 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 11 cents, or 1.05%, to $10.56.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were steady at $10.20.

Away from the GSEs, Morgan Stanley & Co. Inc.’s 5.85% series K fixed-to-floating rate noncumulative preferreds (NYSE: MSPrK) added a nickel to finish at $25.51.

Discover Financial Services Inc.’s 6.5% series B noncumulative preferreds (NYSE: DFSPrB) meantime ended off 2 cents at $26.20.

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