Preferreds recover some losses; 'extreme bloodletting' stops; NextEra does well in trading

By Andrea Heisinger

New York, Nov. 16 - There was a bit more enthusiasm about the preferred stock market at midday Friday than there had been in previous days as some sectors took a hit amid weakness.

A trader said at midday that "the market was stronger today. We're pretty close to completely erasing yesterday's losses, but we're still down."

He then added that "the extreme bloodletting has stopped."

Later in the day, a second trader said that "everything's bouncing back slightly from yesterday."

"It's pretty quiet," he added.

There was light activity, as is typical for a Friday, although some recent issues were seen being actively traded.

The new $500 million of 5.125% junior subordinated debentures due 2072 priced on Wednesday by NextEra Energy Capital Holdings Inc. was the most actively traded preferred issue as of midday, a source said.

The $25-par notes had 1.5 million shares change hands after being freed to trade at about 9:15 a.m. ET. They were quoted at par, which "showed it was a well-priced deal" after only being freed to trade for two hours, the source said.

By the close, 1.34 million of the NextEra preferreds had traded, closing at $24.663, or down 33.7 cents on the day, a trader said.

A recent 5.95% series I perpetual preferred from Goldman Sachs Group Inc. was the next most-active issue. About 750,000 shares had traded, with the $25-pars up 13 cents on the day to $24.50, a trader said. The preferreds were priced in a $750 million offering on Oct. 17.

Tuesday's $600 million sale of 5.125% noncumulative perpetual series O preferreds from Wells Fargo & Co. was up 13 cents on the day, seen at about $24.70 in late morning trading. By early afternoon, the preferreds were quoted by another trader at $24.85.

"The last trade was for $24.77, but that was a small size," a trader said. The Wells Fargo notes were quoted at $24.72 at midday on Thursday.

The new 5.625% perpetual $25-par preferreds priced by First Republic Bank late on Thursday had not been freed to trade but were seen by a trader at $24.70 in the gray market as of midday. By early afternoon, a second trader saw them offered at $24.55.

The coming week has only "two reasonable days to really get anything done," as one market source said.

"I would assume there will be something, but pricing would be sloppy," he said.

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