Midday Commentary: Preferred stocks begin week with firm tone; recent deals remain in play

By Stephanie N. Rotondo

Phoenix, Feb. 3 - Preferred stocks were ticking higher in early Monday trading, even as straight equities were coming off.

The Wells Fargo Hybrid and Preferred Securities index was up 50 basis points as of mid-morning.

No new deals were announced Monday, though deals from previous weeks continued to see some action.

Verizon Communications Inc.'s 5.9% $25-par notes due 2054 - a $500 million deal that came Thursday - were seen at par bid, $25.10 offered in the Street, a trader said.

JPMorgan Chase & Co.'s $850 million of 6.7% series T noncumulative perpetual preferreds - a deal from Jan. 23 - were meantime pegged at $24.75 bid, $24.90 offered.

The trader noted that the recent deals, including JMP Group Inc.'s $42 million of 7.25% $25-par senior notes due 2021, were all on the small side and were "all over-bought."

As for this week's new issue calendar, the trader said he had yet to hear of anything coming, but he expected the pipeline to warm up now that the "earnings blackout" was at or near its end.

Away from new issues, a trader noted that First Industrial Realty Trust Inc. had announced a redemption of its $1,000-par series F and G flexible cumulative redeemable preferred stock.

"Back in the day, they had just a ton of preferreds out," the trader remarked. "Now they are doing so well, they don't need them."

The series F shares will be redeemed March 6 and the series Gs on March 31.

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