Preferreds gyrate in early trading, end flat; Allstate’s recent 6.25% noncumulatives list

By Stephanie N. Rotondo

Phoenix, June 19 – A preferred stock trader said the market was quiet on the back of new jobs numbers.

Of the numbers, the trader said they were “pretty much in line with what everybody was expecting.”

The Labor Department reported Thursday that unemployment claims fell by 6,000 to 312,000 last week.

As for the Wells Fargo Hybrid and Preferred Securities index, it was gyrating wildly at mid-morning. The index hit its highs around noon, then steadily drifted lower, ending the day flat.

“The market was up about 9 [basis points] around midday, but then it largely faded through the afternoon, driven by the Treasury market,” a market source said.

National General Holdings Corp.’s $55 million of 7.5% series A noncumulative preferreds – a deal that priced Wednesday – were quoted at $24.55 bid, $24.75 offered in early trading.

A trader said the new issue had yet to be assigned a Bloomberg reporting symbol, making it harder to trade. He opined that once a symbol was in place, “it could move up.”

Morgan Stanley & Co. LLC and UBS Securities LLC were the joint bookrunning managers. Keefe Bruyette & Woods Inc., William Blair & Co. and JMP Securities LLC were the co-managers.

Meanwhile, the Allstate Corp.’s 6.25% series F fixed-rate noncumulative perpetual preferred stock began trading on the New York Stock Exchange on Thursday.

The $250 million deal priced via Incapital on June 5. The ticker symbol is “ALLPF.”

The preferreds ended the day at $25.08, which compared to opening levels of $25.06. The issue hit a high of $25.37 during the session.

A trader said the paper was quoted at $25.25 bid, $25.40 offered early in the session.

As for JPMorgan Chase & Co.’s recently priced $850 million issue of 6.3% series W noncumulative perpetual preferreds, a market source said the paper closed up 9 cents at $24.82. However, he said the volume weighted average price of $24.76 was “more realistic.”

The deal priced late Monday, coming upsized from $400 million. The deal has struggled to reach par ever since.

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