Preferreds edge higher amid limited volume; new Allstate issue prices earlier than planned

By Stephanie N. Rotondo

Phoenix, June 5 – After several down sessions, the preferred stock market looked to be edging higher in Thursday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points as of mid-morning. By the end of the day, it was up 13 bps.

One trader said things “seem to have stabilized,” also noting that the market was “rather quiet considering all the news coming out of Europe.”

The European Central Bank announced a series of moves aimed at avoiding deflation, including an interest rate cut.

“Today was a little bit more normal day for the market,” said another market source. However, he added that volume was “dramatically” lighter than that seen on Wednesday.

Allstate Corp.’s offering of series F fixed-rate noncumulative perpetual preferred stock via Incapital LLC’s Leopards program priced ahead of schedule, according to a market source.

On Wednesday, a market source told Prospect News that the offering had already closed, though the initial plan was to have the deal priced by June 9. As such, it was expected that pricing would be accelerated.

The Northbrook, Ill.-based insurance company sold $250 million of the 6.25% preferreds, the source said.

After pricing, he said he had last seen the issue at par, and though he wasn’t sure how accurate that was, he remarked that it made sense given the type of offering it was.

Resource Capital rises

Resource Capital Corp.’s $110 million of 8.625% series C fixed-to-floating-rate cumulative redeemable preferreds were mimicking the market, trading higher early in the session.

A trader saw the issue around $24.90. Paper had been in a $24.70-to-$24.80 range on Wednesday.

The deal priced Tuesday and freed from the syndicate on Wednesday.

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