Preferred Stock Midday Commentary: Qwest frees; Public Storage to list; Fannie, Freddie lifted

By Stephanie N. Rotondo

Phoenix, June 15 - The preferred stock market was subdued at midday Friday as the market looked to an upcoming vote in Greece over the weekend.

"Nobody's doing much heading into the Greek vote," a trader said.

Qwest Corp.'s new $400 million issue of $25-par 7% 60-year senior notes freed from the syndicate during the session, the trader said.

The deal priced Thursday.

The trader quoted the issue at $24.92 bid, $24.95 offered.

Qwest is using proceeds from the sale to redeem its 7.5% notes due 2051 (NYSE: CTW). At midday, that issue had fallen 8 cents to $25.94.

Also in the primary, Public Storage's $250 million of 5.625% series U cumulative perpetual preferreds are expected to list on the New York Stock Exchange on Monday.

The expected ticker symbol is "PSAPU." The issue priced June 6.

A trader said the preferreds were "still hanging right around par," seeing a $25.05 bid for paper.

In the secondary, a trader said that he was "seeing an uptick" in Freddie Mac and Fannie Mae issues.

"Somebody's out there as a buyer," he said. "Offers are just getting lifted, lifted, lifted."

He added that trading in the preferreds was not particularly heavy, but it was notable that the issues were moving up 25 cents to 40 cents "across the board."

Freddie's 5.7% noncumulative perpetual preferreds (OTCBB: FMCKP), for instance, were up 42 cents, or 20.49%, at $2.47. Fannie's 7.625% series R noncumulative preferreds (OTCBB: FNMAJ) were up 20 cents, or 16.67%, at $1.40.

"Every now and then, they have an unusual amount of activity," the trader said, noting that there was no fresh news on the government-backed mortgage buyer.

Also, ING Groep NV received a downgrade from Moody's Investors Service Friday.

ING was cut, along with four other Dutch banks, due to the belief that the country's banking system will face difficulties through 2012 and possibly beyond than that.

ING preferreds were therefore slipping. The 8.5% perpetual hybrid capital securities (NYSE: IGK) declined 23 cents in midday trading to $24.97.

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