Morning Commentary: Preferreds rebound as week closes out; DTE units recovering; Capital One lists

By Stephanie N. Rotondo

Seattle, Dec. 2 – Preferred stocks were looking to rebound on Friday after getting clobbered for most of the week.

“The long bond is snapping back after getting beat down this week,” a trader said. He also noted that new unemployment data was “spot on.”

The latest report showed that unemployment dropped to 4.6%.

But the jobs number, combined with other economic data, indicates that “we will most likely see a rate increase later this month,” the trader commented.

As was expected, Capital One Financial Corp.’s $500 million of 6% series H noncumulative perpetual preferred stock began trading on the New York Stock Exchange on Friday under the ticker symbol “COFPH.”

The preferreds were pegged at $24.26 bid, $24.44 offered in early dealings.

However, it was the existing series Gs (NYSE: COFPG) that were trading more actively, falling 14 cents to $21.44.

The new issue came Nov. 21, upsized from $200 million. Price talk was in the 6.125% area.

BofA Merrill Lynch, J.P. Morgan Securities LLC, UBS Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the books.

As for the current week’s deals, DTE Energy Co.’s new $280 million of 6% $25-par 2016 series F junior subordinated debentures due 2076 were rebounding a bit to $24.20 bid.

The paper had been closer to $24.00 on Thursday.

The deal priced Monday.

Looking ahead, a trader said he was hearing that at least three more new issues were planned for the month, all of them investment grade.

He did not yet have any specifics on those proposed deals.

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