Midday Commentary: Morgan Stanley launches $25-par, $1,000-par offerings; Goldman doing well

By Stephanie N. Rotondo

Phoenix, April 22 - The primary preferred stock market churned out another set of deals on Tuesday.

On the heels of the Goldman Sachs Group Inc.'s dual offering on Monday, Morgan Stanley followed suit with a double deal of its own. The New York-based investment bank said it was selling $25-par series G noncumulative perpetual preferred stock, as well as $1,000-par series H fixed-to-floating rate noncumulative perpetual preferreds.

A trader said price talk on the $25-par deal was "adjusted down" to 6.625% from 6.875%. Talk on the $1,000-par deal was around 5.5%, he said.

Though he had not seen any gray markets for the $1,000-pars, the $25-pars were pegged at $24.94 bid early in the session.

Morgan Stanley & Co. LLC is running the books on both offerings.

As for the Goldman deals - both of which priced and freed on Monday - the $700 million of 6.375% $25-par series K fixed-to-floating rate noncumulative perpetual preferred stock was trading around par, while the $1.3 billion issue of 5.7% $1,000-par series L fixed-to-floating rate noncumulative perpetual preferred stock was at 102.

A trader said Morgan Stanley and Goldman were dominating early trading.

"There's not enough to go around," he said. "[These deals] are being launched and gobbled up real quick."

He speculated that at least one more deal could come this week.

Overall, the preferred market continued to tick higher.

The Wells Fargo Hybrid and Preferred Securities index was up 11 basis points as of mid-morning.

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