Preferreds end week mixed; Morgan Stanley holds in a steady range; Just Energy a no-show

By Stephanie N. Rotondo

Seattle, Jan. 27 – Preferred stocks were on the mixed side in Friday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 13 basis points, while the U.S. iShares Preferred Stock index was down 8 bps.

A trader said Morgan Stanley & Co. Inc.’s $1 billion of 5.85% series K fixed-to-floating rate noncumulative preferreds – a benchmark deal that priced Tuesday – was holding at $25.25 bid, $25.30 offered.

Another market source pegged the preferreds at $25.25.

The paper has been trading in that area since pricing.

As for the 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPrI), they traded up 14 cents to $26.44. That issue had declined in the wake of the new deal pricing.

Meanwhile, Just Energy Group Inc.’s planned offering of series A fixed-to-floating rate cumulative redeemable preferred stock had not yet priced, according to a trader.

However, he did see the issue quoted at $24.55 bid, $24.62 offered in the early gray market.

The deal was first announced on Thursday. Stifel Nicolaus & Co. Inc., FBR Capital Markets and National Bank Financial Inc. are running the books.

As for the secondary, it continued to be the Fannie Mae-Freddie Mac show.

A trader said the GSE-linked preferreds were “jumping for some reason,” though he was not sure what had been driving the paper higher over the last couple of days. He noted that there was some buzz that a court case decision could be coming soon.

Another source said there was “nothing materially new” out on the GSEs, other than that “[Bill] Ackman was really positive on them in his statement to investors.”

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) ended off 3 cents at $8.25, though the preferreds were initially up 13 cents, or 1.46%, at $9.01.

Over 9.41 million of the preferreds traded during the final trading session of the week.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were meantime down 19 cents, or 2.24%, at $8.28, on about 1.53 million shares traded.

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