Morning Commentary: Preferreds off as week begins; Qwest plans offering of $25-par notes

By Stephanie N. Rotondo

Phoenix, Sept. 22 – The new week was getting off to a soft start for the preferred stock market, according to the Wells Fargo Hybrid and Preferred Securities index.

The index was off 10 basis points at mid-morning.

Still, that wasn’t stopping the primary space from pushing out more deals.

A market source said Qwest Corp. was bringing an offering of at least $250 million $25-par 40-year senior notes. Initial price talk is 6.875% to 7%.

A trader saw a gray market quote of $24.75 bid, $24.85 offered for paper early in the session.

The notes are non-callable for five years. Proceeds will be used to retire outstanding debt.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the bookrunners.

Among recent deals, AmTrust Financial Services Inc.’s $80 million of 7.625% series C noncumulative perpetual preferred stock began trading on the New York Stock Exchange on Monday under the ticker symbol “AFSIPC.”

The deal priced Sept. 9.

The preferreds were trading at $24.76 at mid-morning, unchanged from opening levels.

And, the Gabelli Healthcare & WellnessRx Trust’s $35 million issue of 5.875% series B cumulative perpetual preferreds were seen in a $24.80 to $24.92 context.

That issue came on Wednesday.

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