Barclays' preferreds up as bank tenders for debt; Bank of America better; DTE, Aviva rise

By Stephanie N. Rotondo

Portland, Ore., Dec. 5 - Preferred stocks were trading "stronger," a trader said Monday.

However, he noted that there "wasn't great customer flow."

Another trader said the market rallied, but that there was "not a lot of buy interest."

Of the day's goings-on, Barclays Bank plc's preferreds were popping up on news the company was buying back up to $3.9 billion of its tier I capital securities.

"They kind of came back to earth late in the day," a trader remarked, but paper was still up considerably.

Meanwhile, sources also saw buyers coming in for Bank of America Corp.'s preferreds. One issue gained more than 7% on the day.

In the primary market, DTE Energy Co.'s 6.5% $25-par junior notes moved up over the $26-mark, according to a trader. There was also rumor of another new issue coming before the end of the month.

Barclays firms on tender

Barclays' preferreds "jumped" on news the U.K.-based bank was looking to repurchase up to $3.9 billion of tier I debt.

Though the issues ended firmer, they "slid back in a little bit" by the end of business, a source said.

The 7.1% series 3 noncumulative callable dollar preference shares (NYSE: BCSPA) gained 92 cents, or 4.98%, to close at $21.01, while the 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) moved up 70 cents, or 3.09%, to $23.38.

In a statement released Monday, Barclays said the tender offer was an effort to "enhance further the quality of its capital structure through the reduction of non-Basel III compliant tier one capital and subsequent generation of additional core tier one capital."

Holders who tender by the early tender deadline - Dec. 16 - will receive an early tender premium.

Bank of America climbs

In domestic financials, Bank of America preferreds were also heading higher.

The floating-rate series E noncumulative preferreds (NYSE: BACPE) improved by $1.25, or 7.58%, to end at $17.75.

"I heard there are buyers out there," a trader said of the issue, which he noted is also part of the company's recent exchange offer.

The 8.2% series H depositary shares (NYSE: BACPH) meantime gained 51 cents, or 2.32%, to $22.51.

"That a more liquid issue," the trader noted.

Bank of America is based in Charlotte, N.C.

DTE, Aviva up

DTE Energy's 6.5% $25-par notes due 2061 traded as high as $26.65, according to a trader.

Another trader noted that there is no symbol yet for the $280 million deal that priced last week.

Meanwhile, Aviva plc's 8.25% $25-par subordinated capital securities (NYSE: AVV) were holding in that $24.15 area, the trader said.

The issue closed up a nickel at $24.17 on Monday.

Rumors are circulating that a small regional bank could bring a new issue before the end of the year.

"I don't think it's going to happen," said one trader, pointing to market volatility.

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