Midday Commentary: Public Storage not yet freed; Fannie, Freddie preferreds cruising higher

By Stephanie N. Rotondo

Phoenix, March 11 - Preferred stocks were again tilting toward the softer side during early Tuesday trading.

The Wells Fargo Hybrid and Preferred Securities index was trading off 3 basis points as of mid-morning.

In the primary, Public Storage Inc.'s $225 million of 6.375% series Y cumulative preferreds - a deal that priced late Monday - was seen bid for at $24.70 by one trader.

He said he did not think the issue had freed to trade just yet.

No other new deals were announced as of early Tuesday.

In the secondary, Fannie Mae and Freddie Mac preferreds were "running like crazy," according to a trader.

The gains have been propelled by chatter about the GSEs and their potential to bring in nearly $180 billion for taxpayers over the next 10 years if the government chooses to reform the agencies instead of winding them down.

On Tuesday, senators released details about a bill that would in fact wind down the pair of mortgage giants. However, a trader said there was only a small chance that the bill would actually come to the floor and that it was more than likely "political wrangling" ahead of elections.

Looking forward, a trader noted that Wednesday might see some increased activity, given that it was a "big ex-dividend date."

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