Midday Commentary: Preferred market comes down; GM to 'clean up' preferreds in 2014

By Stephanie N. Rotondo

Phoenix, Oct. 30 – A preferred stock trader said that "everything is just stagnant" in the market early Wednesday.

The Wells Fargo Hybrid and Preferred Securities index was off 4 basis points as of midday.

The trader commented that in its earnings conference call, General Motors Co. said it would be "cleaning up its remaining preferreds" come 2014.

Also, the trader said that Connecticut Light and Power Co. planned to seek preferred shareholder approval to allow the company to issue new unsecured debt. The trader pointed out that it would be bad for the preferreds and it would be better for investors if the company simply redeemed the shares before issuing new debt.

Meanwhile, Radiant Logistics Inc. said it planned to sell up to $28.75 million of series A cumulative redeemable preferreds, adding another new issue to the calendar.

And, as was expected, First Republic Bank's $200 million of 7% series E noncumulative perpetual preferreds - a deal that priced Oct. 21 - were admitted to the New York Stock Exchange on Wednesday.

The ticker symbol is "FRCPE." Paper was trading at $25.01 at midday, up from opening levels of $24.99.

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