Morning Commentary: Bank of America preferreds not yet freed but higher; CHS gaining momentum

By Stephanie N. Rotondo

Phoenix, Jan. 21 – The preferred stock market was attempting to stem losses from the previous session in early Wednesday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 6 basis points at mid-morning. The index lost 19 bps in Tuesday trading.

Among new deals, Bank of America Corp.’s $1 billion of 6.5% series Y noncumulative perpetual preferreds were also ticking higher, according to a trader.

The paper was quoted at $24.80 bid, $24.85 offered early in the day.

The preferreds had not yet freed from the syndicate, the trader said.

The deal came Tuesday, upsized from $250 million and tighter than the 6.625% initial price talk.

BofA Merrill Lynch ran the books.

As for the bank’s other outstanding preferred issues, they were looking to recover ground lost on the heels of the new issue.

The 6.625% series W noncumulative preferreds (NYSE: BACPW) were up a penny in early trades at $25.60.

Meanwhile, CHS Inc.’s $450 million of 7.5% class B series 4 cumulative redeemable preferreds – a deal that priced Jan. 13 – was also on the rise.

A trader pegged the preferreds at $25.30 bid, $25.40 offered.

The trader remarked that at least one more new issue was slated for the week, likely from a business development company.

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