Morning Commentary: Preferred stock market aims for strong close; recently priced deals hold steady

By Stephanie N. Rotondo

Seattle, May 13 – Preferred stocks were aiming for a positive close for the week, as the Wells Fargo Hybrid and Preferred Securities index was inching up 5 basis points in early trading.

Despite the upward move, a trader noted that activity was muted. Even newer issuers “aren’t really moving,” he said.

Public Storage’s $200 million of 5.125% series C cumulative preferreds – a deal from Tuesday trading under the temporary ticker “PBBSP” – were offered at $24.97, according to the trader. DuPont Fabros Technology Inc.’s $175 million of 6.625% series C cumulative redeemable preferreds – another deal from Tuesday – were seen at $25.02 bid, $25.05 offered.

Those securities have been holding in that range for most of the week.

IberiaBank Corp.’s 6.6% series C fixed-to-floating rate noncumulative perpetual preferreds – a deal priced May 3 – were meantime pegged at $25.52 bid, $25.62 offered.

The company sold $50 million of the preferreds in the original issuance. On May 9, the bank said its $7.5 million greenshoe had been exercised in full, lifting total issuance to $57.5 million.

Looking ahead, chatter was that the new issue pipeline was going to continue to flow. But a trader said that might not be the case.

“Some people have mentioned that they are putting deals on hold,” he said. “But I don’t know why.”

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