Preferred market rises with Treasuries; primary quiets down; Wells Fargo, Farm Credit gain

By Stephanie N. Rotondo

Phoenix, July 17 - The preferred stock market was "slightly up with Treasuries," a trader said Wednesday.

For their part, Treasuries were boosted by comments made by the Federal Reserve's Ben Bernanke, who said that the central bank's bond purchase program was not on a "preset" course.

"The market was up in the morning and then kind of faded in the afternoon," a market source said. Though preferreds were "up significantly" around lunchtime, they ended the day up only a penny on average, he said.

No new deals hit the tape during the midweek session, and a trader opined that the calendar will remain light for the rest of the week. However, assuming the market stays stable, he expects to see more deals starting to emerge next week.

As for this week's new issues, Wells Fargo & Co.'s $1.5 billion of 5.85% series Q class A fixed-to-floating-rate noncumulative preferreds ticked up a touch to $25.05 at midday, according to a trader.

After the market closed, a source said the issue was the most actively traded security of the day, with over 6.5 million shares changing hands.

He saw the issue close at $25.19 with a volume-weighted average price of $25.104.

The issue priced Monday and freed up on Tuesday.

Farm Credit Bank of Texas' Rule144A offering of 6.75% fixed-to-floating-rate $100-par class B series 2 noncumulative perpetual preferreds were meantime pegged at par bid at midday.

Another source said he heard the issue was closer to par ¼ bid.

"It was reasonably well underwritten," he said of the deal.

Aspen loses on loss estimate

Aspen Insurance Holdings Ltd.'s 5.95% fixed-to-floating-rate noncumulative perpetual preferreds (NYSE: AHLPC) dropped 2 cents in midweek trading, closing at $26.30.

The slip came one day after the company released an initial estimate for catastrophe losses for the second quarter.

The Hamilton, Bermuda-based insurer said it expects to see a loss of about $59 million due to massive floods in Central Europe, Canada and India as well as tornadoes and hailstorms in the United States.

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