Fed policy meeting mutes preferred stock trading; Wells Fargo above par; Fifth Third lists

By Stephanie N. Rotondo

Phoenix, Dec. 17 - Preferred stocks were softening Tuesday ahead of the Federal Reserve's meeting.

A trader said investors were waiting to see if the central bank would give some sort of direction on how the economy is doing before "getting ahead of that train." Additionally, he noted that the federal government was moving toward passing a recently announced budget that would also avoid a debt ceiling debate come the New Year.

"That could give some stability to the market," he said.

The Wells Fargo Hybrid and Preferred Securities index was trading down 8 basis points as of midday. A market source said that the index "broke through" around noon ET, trading slightly positive. The index then finished the day off 1 bps, or "more or less flat."

Meanwhile, Wells Fargo & Co.'s $750 million of 6.625% series R class A fixed-to-floating rate noncumulative preferreds - a deal that came Wednesday - was seen at $25.08 bid, $25.15 offered early in the session.

After the close, a source said the issue was down 2 cents at $25.13. The volume weighted average price was $25.12.

Among other recent deals, Fifth Third Bancorp's $450 million of 6.625% series I fixed-to-floating rate noncumulative preferreds listed on the Nasdaq Global Select Market, according to a trader.

The deal priced Dec. 4. The ticker symbol is "FITBI."

Paper was trading down 15 cents at midday at $24.55. However, the issue managed to recoup at least some of those losses, closing out the session at $24.67, off 3 cents.

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