Morning Commentary: Preferreds weaken amid broader sell-off; Qwest’s $25-par notes list on NYSE

By Stephanie N. Rotondo

Phoenix, Sept. 22 – Uncertainty over the global and domestic economies appeared to be putting pressure on the markets Tuesday, including the preferred stock market.

The Wells Fargo Hybrid and Preferred Securities index was off 7 basis points at mid-morning. In the common stock market, the Dow Jones industrial average was down 1.42%, while domestic crude oil prices had dropped 2.41%.

“We’re still trying to make heads or tails of anything,” a trader said. “A lot of our stuff just isn’t moving today.”

The overall weakness of the day was being blamed on the Federal Reserve’s decision to hold interest rates steady last week. One CNBC commentator remarked that the central bank had sent the wrong message to the markets in failing to take some action.

As for the preferred space, Qwest Corp.’s $400 million of 6.625% $25-par senior notes due 2055 began trading on the New York Stock Exchange.

The ticker symbol is “CTZ.” The deal priced Sept. 10.

A trader quoted the notes at $24.81 bid, $24.83 offered.

On Monday, the notes had not seen much volume, according to a market source. But the source opined that once the issue listed, activity in the notes could pick up.

Sure enough, come early Tuesday trading, the issue was one of the more active among preferred securities, with over 537,000 shares being exchanged.

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