Midday Commentary: American Capital plans offering of cumulative redeemable preferred stock

By Stephanie N. Rotondo

Phoenix, May 5 - The preferred stock market was getting the week off to a strong start on Monday.

The Wells Fargo Hybrid and Preferred Securities index was up 17 basis points as of mid-morning.

American Capital Agency Corp. brought a new deal to market, an offering of at least $100 million of series B cumulative redeemable preferreds.

Price talk is 7.75% to 7.875%, a trader said.

The trader also noted that there is no selling group, seeing a less 40-cent bid to $25.08 offered gray market quote.

"So that means there are not a lot of people in the deal," he said.

The market had not yet been impacted by word that U.S. attorney general Eric Holder was considering laying down criminal charges against Credit Suisse and BNP Paribas.

BNP has been under investigation for violations involving working with countries that are currently under sanctions in the United States. Credit Suisse has been targeted for providing illegal tax shelters for Americans.

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