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Bank preferreds struggle; Bank of America preferreds hit hard; First Niagara active in trading
By Andrea Heisinger
New York, Dec. 19 - The preferred stock market remained quiet on Monday as traders watched financial paper take hits.
Bank and brokerage names were "down about 40 cents" on $25.00-par preferreds, a source said.
Preferreds were down 64 basis points overall, or an average of 16 cents, a trader said after the close.
"It's holiday-week volume," he said. "Paying securities are light."
There are no new preferred stock issues expected for the week or the remainder of the year.
"Nobody's bringing anything," a trader said.
There was no official listing of First Niagara Financial Group Inc. on the New York Stock Exchange, a source said. The company got its temporary ticker symbol, "FNFG," on Friday.
The recent new issue saw 960,000 preferreds change hands, and it closed at $25.20. First Niagara sold the fixed-to-floating-rate preferreds at par of $25.00 on Dec. 7.
BofA, financials take hit
Bank of America Corp. was "leading the charge" of those with outstanding financial preferreds that saw losses, a trader said.
Coming accounting changes could accelerate losses in banks, and there is also the uncertainty of regulatory changes like the Volcker Rule, the source said as reasons for the drop in value.
"There's just a general distaste for financials," he said.
The Bank of America series H preferreds were down 48 cents on the day having traded 407,000 preferreds and landing at $21.71.
"They were beaten up pretty bad," a trader said of Bank of America issues in general.
About 313,000 of the Merrill Lynch series Q preferreds traded, and they fell 56 cents on the day to $21.68, the trader said.
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