Morning Commentary: Recently priced deals doing well; oil price spike boosts oil-linked preferreds

By Stephanie N. Rotondo

Seattle, Jan. 28 – A preferred stock trader said that “everything was getting lifted for awhile” in early Thursday trading.

However, he noted that as the broader markets started to wane, so did preferreds. Still, the Wells Fargo Hybrid and Preferred Securities index was up 15 basis points at mid-morning.

Also firming were recent new issues, such as Citigroup Inc.’s $900 million of 6.3% series S noncumulative preferreds.

A trader pegged the issue “right around par” at $24.96 bid, $24.99 offered.

The issue priced Tuesday and freed to trade on Wednesday.

Qwest Corp.’s $235 million of 7% $25-par notes due 2056 – a deal priced Monday and freed on Tuesday – were meantime seen at $24.90 bid.

Among deals priced last week, Bank of America Corp.’s $1 billion of 6.2% series CC noncumulative preferreds were seen bid at $25.18. Wells Fargo & Co.’s $875 million of 5.7% class A series W noncumulative perpetual preferreds were quoted at $25.20 bid.

Wells Fargo’s deal came Jan. 19, and BofA priced its offering on Jan. 21.

In listed securities, a trader said things were “flat except for some of the oil names.” Domestic crude prices were popping Thursday as Saudi Arabia indicated it was willing to cut production.

West Texas Intermediate crude was up nearly 5.5% at mid-morning, trading north of $34 a barrel.

In response, names like Breitburn Energy Partners LP were moving up. The 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were up $1.39, or 21.25%, at $7.93.

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