Preferred stocks sink, then rally by day’s end; Wells Fargo’s 6% preferreds list on NYSE

By Stephanie N. Rotondo

Phoenix, July 24 – Preferred stocks rebounded from early weakness Thursday, but given an overall lack of liquidity, traders were not sure what had spurred the movement.

“There’s just no volatility,” a trader said, citing “summer doldrums, apathy” as the causes. “Until we get a little more clarity on economic numbers, which may drive rates higher, I just don’t think we’ll see anything.”

As the market opened, things seemed pretty stable, according to the Wells Fargo Hybrid and Preferred Securities index. However, at mid-morning, the index took a sudden dip, sliding down as much as 47 basis points.

But the drop was short lived, as the index came back to trade in line with previous levels to up just slightly.

The index closed the day up 5 bps.

As scheduled, Wells Fargo & Co.’s $800 million of 6% series T class A noncumulative perpetual preferreds began trading on the New York Stock Exchange on Thursday.

The ticker symbol is “WFCPT.”

The deal priced July 14, coming upsized from $250 million. On July 17, the San Francisco-based bank exercised a $100 million greenshoe, lifting total issuance from $700 million.

The preferreds finished the session at $24.88. Paper was trading at $24.86 at mid-morning, up from opening levels of $24.85.

Among other Wells’ issues, the 5.85% series Q fixed-to-floating rate noncumulative perpetual preferreds (NYSE: WFCPQ) put on 6 cents to end at $26.01.

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