Morning Commentary: Preferred market opens with positive tone; Valley National preferreds on tap

By Stephanie N. Rotondo

Phoenix, June 16 – The preferred stock market was up in early Tuesday trading as the Federal Open Market Committee began its two-day meeting.

The meeting is expected to shed light on whether or not the central bank will increase interest rates in September.

Ahead of any news out of that gathering, the Wells Fargo Hybrid and Preferred Securities index was up 6 basis points.

The new issue calendar had a deal added to the tape. Valley National Bancorp announced a $110 million offering of series A fixed-to-floating rate noncumulative perpetual preferreds.

A trader said price talk was around 6.25%. He said the deal was “trading relatively well in the gray,” pegging the issue in a $24.80 to $24.85 context.

Sandler O’Neill + Partners LP, Keefe Bruyette & Woods Inc. and RBC Capital Markets are running the books on the preferred deal.

Concurrently with the preferred sale, the Wayne, N.J.-based financial institution is selling $90 million of subordinated debentures due 2025.

Among recently priced deals, AmTrust Financial Services Inc.’s $150 million of 7.25% $25-par junior subordinated notes due 2055 – a deal priced Thursday – were finally “catching a bid,” according to a trader.

The trader saw the issue moving up to $24.70 bid, $24.77 offered. Paper had closed below $24.60 on Monday.

The issue – which came via Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods Inc. – freed to trade on Monday.

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