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Published on 9/29/2014 in the Prospect News Preferred Stock Daily.

Morning Commentary: Pimco funds suffer after stunning news; Qwest ticks up; primary calendar eyed

By Christine Van Dusen

Atlanta, Sept. 29 – Funds continued to flow out of Pacific Investment Management Co. LLC (Pimco) on Monday as investors digested the news that the asset management company’s co-founder, Bill Gross, had left to work for Janus Capital Group.

Gross surprised the markets on Friday by announcing he would leave California-based Pimco, which manages $2 trillion in assets and has seen more than $10 billion flow out since the personnel change came to light.

“We’re seeing some of the Pimco funds dropping off, with an outflow of cash because of Gross leaving,” a trader said.

In other news on Monday morning, Qwest Corp.’s new $500 million issue of 6 7/8% $25-par senior notes due 2054 were trading at $24.40, following Friday’s low of $24.35.

The Monroe, La.-based telecommunications company has two 7% issues coming due in 2052, one in April and one in July. Both were recently spotted trading above par.

“I hear there could be a full calendar, but with the Qwest trading at these levels, we may let the secondary market firm up before we bring out new issues,” the trader said.

Also on Monday, RBS Capital Funding Trust VII’s 6.08% noncumulative guaranteed trust preferred securities traded down 3 cents at $23.89 on 36,552 shares traded.

Barclays Bank plc’s 8 1/8% non-cumulative callable dollar preference shares, series 5 ADR, were seen moving down 7 cents to $25.981 on 24,962 shares traded.

And Wells Fargo & Co.’s 8% depository shares non-cumulative perpetual CI A preferred stock, series J, dropped 10 cents to $28.85 on just 19,338 shares traded.

“It’s quiet,” the trader said.


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