Midday Commentary: Preferred stocks see bit of a sell-off; CHS' new deal prices, not yet freed

By Stephanie N. Rotondo

Phoenix, Sept. 20 - The preferred stock market was "selling off a little bit," a trader said Friday.

At midday, the Wells Fargo Hybrid and Preferred Securities index was down 18 basis points.

The trader also noted that it was a little on the quiet side and that many people were out. Some seats were likely empty due to the Jewish holiday Sukkot.

CHS Inc. priced a $250 million issue of 7.875% series 1 class B cumulative redeemable preferred stock late Thursday, though details didn't emerge until Friday morning.

Initial price talk was 7.75% to 8%.

A trader said the deal had not yet freed to trade, seeing paper moving in a $24.85 to $24.87 context.

Meanwhile, Citigroup Inc.'s $900 million of 7.125% fixed-to-floating rate series J noncumulative perpetual preferreds continued to keep investors busy. A trader said the issue was trading around "$25.20-ish" bid early in the session.

The deal - which priced Sept. 12 - was assigned a reporting symbol earlier in the week, leaving sources to opine that the shares will list on the New York Stock Exchange early next week.

The expected symbol is "CPJ."

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