Preferreds 'bounce around,' close soft; Synovus admitted to NYSE; Fannie, Freddie dominate

By Stephanie N. Rotondo

Phoenix, July 30 - The preferred stock market "bounced around most of the day," a market source said Tuesday, noting that it ended down.

Another trader said the day started positive but faded by midday.

"We were up this morning; then we sold off a little," a trader said. He attributed the early strength to new economic data that was "in line" with expectations.

"It's a mixed market," he added. "Nothing is really standing out."

The first source noted that Treasuries and the straight equity markets were "mostly flat" on the day, which did little to help the preferred space.

"As to what is driving it, I couldn't say," he said, adding that volume was light "aside from a couple of Fannie [Mae] and Freddie [Mac] issues and Wells [Fargo & Co.]."

"Today made [Monday] look busy," he said.

The source did concede that an upcoming meeting of the Federal Open Market Committee could be the cause of the market's lackluster performance. Investors are hoping the central bank will give some indication as to when it will begin tapering its stimulus program.

In new listings, Synovus Financial Corp.'s $130 million of 7.875% series C fixed-to-floating rate noncumulative preferreds hit the New York Stock Exchange, as was expected.

The deal priced July 22. The ticker symbol is "SNVPC."

The paper was trading at $26.04, up 29 cents, or 1.13% from Monday. A trader said the market for paper was $25.85 bid, $26.04 offered.

At the close, the issue was seen up a dime at $25.85.

Costamare Inc. in the meantime priced an offering of series B cumulative redeemable preferreds late in the day.

The deal was first announced on Monday and price talk had been placed between 7.625% and 7.75% on the non-rated issue. A trader saw a gray market quote of $24.60 bid, $24.75 offered at midday.

Costamare sold $50 million of the 7.625% preferreds at par of $25.00 on Tuesday via bookrunners Morgan Stanley & Co. LLC, BofA Merrill Lynch and Credit Suisse Securities (USA) LLC.

Fannie, Freddie, Wells busy

Both Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) and Freddie's 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) saw trading of over 4 million shares during the day, dominating the rest of the market.

The Fannie paper ended off a nickel at $5.00, while Freddie's noncumulatives dipped 7 cents, or 1.37%, to $5.05.

Wells Fargo's recently priced $1.5 billion of 5.85% series Q class A fixed-to-floating rate noncumulative perpetual preferreds (NYSE: WFCPQ) meantime held in at the top of paying securities, with over 1.5 million shares changing hands.

The issue rose 8 cents to $24.49.

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