Morning Commentary: Duke Realty to redeem preferreds; State Street’s recent deal trades above par

By Stephanie N. Rotondo

Phoenix, Nov. 25 – Preferred stocks were again on the firm side Tuesday, even as liquidity dwindled ahead of the Thanksgiving holiday.

The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points at mid-morning.

Late Monday, Duke Realty Corp. announced a redemption of its nearly $15 million of 6.5% series K cumulative redeemable preferreds (NYSE: DREPK).

Holders will receive par plus 10.8333 cents of accrued and unpaid dividends on Dec. 24.

Come early Tuesday trading, the preferreds were trading up a penny at $25.10.

Meanwhile, recent deals continued to be in focus.

State Street Corp.’s $750 million of 6% series E fixed-rate noncumulative perpetual preferreds that priced Nov. 18 moved above par, according to a trader.

The trader quoted the issue at $25.02 bid, $25.05 offered.

Public Storage’s $175 million of 5.875% series A cumulative perpetual preferreds were then seen at $24.68 bid, $24.75 offered.

A trader noted that the issue was trading “basically where the other Public Storage issues trade.” He also remarked that the deal included no tax breaks and that the deal was priced aggressively.

“It’s total retail; you don’t see a lot of institutional in it,” he said.

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