Preferreds tighten; Urstadt planning new deal; Bank of America’s recent deal above par

By Stephanie N. Rotondo

Phoenix, Oct. 21 – It was a “slow grind a little tighter” for preferred stocks in Tuesday trading, according to a trader.

While the trader noted that the market was “pretty quiet,” he did see some strength coming back into the marketplace.

Some of those names that really got beat up [last week] in E&P and shipping have come back,” he said.

The Wells Fargo Hybrid and Preferred Securities index improved 13 basis points by the end of the day. The broader markets were also moving upward, helped by a new report that indicated existing home sales in the United States had risen 2.4% in September, a one-year high.

The primary space saw a small deal hit the tape, a $61.25 million offering of series G cumulative redeemable perpetual preferred stock from Urstadt Biddle Properties Inc.

A trader saw a gray market quote of $24.72 bid, $24.80 offered.

Price talk is 6.625% to 6.875%, according to a market source.

The deal had not priced by the end of the day, another source said.

BMO Capital Markets is leading the deal.

In the company’s existing issues, the 7.5% series D senior cumulative preferreds (NYSE: UBPPD) – the more active of the two issues – fell 17 cents to $25.04.

The 7.125% series F cumulative redeemable preferreds (NYSE: UBPPF) held steady at $25.75.

Meanwhile, Bank of America Corp.’s $1.4 billion of 6.5% $1,000-par series Z fixed-to-floating rate noncumulative preferreds were seen at 101.25 bid, 101.75 offered.

“I’m surprised it hasn’t been more active,” a trader said, remarking that that seemed to be the way of it lately. “Nobody cares about anything... except Ebola.”

The BofA Merrill Lynch-led issue priced Monday.

The bank also had two issues among the day’s most actively traded: the 6.625% series W noncumulative preferreds (NYSE: BACPW) and the floating-rate series 5 noncumulative preferreds (NYSE: BMLPL), linked to Merrill Lynch.

The series Ws closed down a penny at $25.16, while the Merrill Lynch paper fell 12 cents to $20.79.

Though those two issues were weaker on the day, most of the bank’s preferreds finished higher.

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