Preferred stock trading slows in aftermath of Hurricane Sandy; Bank of America active

By Stephanie N. Rotondo

Phoenix, Oct. 31 - It was relatively slow-goings for the preferred stock market Wednesday, as the markets reopened in the aftermath of Hurricane Sandy.

"Everyone in New York is trying to get their offices back together," said one Midwest-based trader. "We've had a few markets from Street brokers, but no one's really in. Everybody is working remotely."

The trader also speculated that the chaos that resulted from Sandy's storm would mean no new issues this week.

"It'll probably continue to be slow-going into the election," he said.

As for the day's goings-on, the trader said that "the only things that are really moving are things that went ex-dividend."

"It was a dead day, going to be a dead week," said another trader. "It is what it is."

However, Bank of America Corp.'s 7% capital securities topped the day's most actively traded list, as investors prepare for the issue to be called early next week.

In other callable issues, Bank of New York Mellon's recently called issues - the 6.875% and 5.95% trust preferreds - were moving downward in midweek trading.

BofA TruPS active

Bank of America's 7% capital securities traded actively, though unchanged, ahead of the redemption of that issue early next week.

The preferreds (NYSE: BACPW) closed at $25.23. The issue will be called Nov. 5.

On Oct. 4, Charlotte, N.C.-based Bank of America announced the redemption of $5.13 billion of trust securities, including the 7% paper. The call is being done due to the occurrence of a "capital treatment event," which refers to the release of new capital rules based on Dodd-Frank.

BNY Mellon issues sink

BNY Mellon is also planning a redemption, as it announced last week.

The New York-based bank said Friday that it was calling its 6.875% and 5.95% trust preferreds on Nov. 26. The call is being funded with proceeds from its recent issuance of 5.2% series C noncumulative perpetual preferreds.

The $550 million issue priced Sept. 12.

The 6.875% preferreds (NYSE: BKPE) were off 63 cents, or 2.42%, to $25.37 by the end of business. The 5.95% paper (NYSE: BKPF) had lost 27 cents, or 1.07%, trading around $25.09.

Meanwhile, the Cs (NYSE: BKPC) put on 12 cents, ending at $25.16.

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