Morning Commentary: Preferreds rebound from early lows, still trading weak; recent deals come in

By Stephanie N. Rotondo

Phoenix, June 5 – A preferred stock trader said the market was “rebounding” early Friday, following a “soft sell-off at the open.”

The Wells Fargo Hybrid and Preferred Securities index was down 10 basis points at mid-morning but earlier in the morning had been down even more.

Despite the rebound, the trader said that the market was “surprisingly quiet.”

The trader said he expected the “good jobs number” to really push up Treasuries. And while Treasuries did improve, it wasn’t as much as expected.

“Nobody is selling anything,” he said. “They’re just watching spreads tighten.”

In a report out Friday morning, the Labor Department said that nonfarm payrolls improved by 280,000 in May, the largest gain since December. Additionally, figures for March and April were revised to show an additional 32,000 jobs added for that period.

Recent deals meantime continued to struggle to gain traction.

A trader said that Associated Banc-Corp’s $65 million of 6.125% series C noncumulative perpetual preferreds – a deal priced Monday – “bid out for awhile” at $24.25, though he wasn’t sure paper actually traded there.

Another source placed the issue at $24.50, off 15 cents from the previous close.

The issue is trading under the temporary symbol “ASCTP.”

UBS Securities LLC and Citigroup Global Markets Inc. were the joint bookrunners.

JPMorgan Chase & Co.’s $1.425 billion of 6.1% series AA noncumulative preferreds – a deal from May 28 – were meantime pegged at $24.65 bid, $24.70 offered.

That paper has been assigned a temporary trading symbol of “JPRGP.”

The bank said in a regulatory filing on Thursday that it had partially exercised an over-allotment option on the deal, selling an additional $125 million shares. That lifted the deal from its original $1.3 billion size.

J.P. Morgan Securities LLC ran the books on that deal.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.