Bank of America’s new preferreds list; Customers Bancorp steady; tender offer lifts Zions

By Stephanie N. Rotondo

Seattle, April 26 – The preferred stock market was looking to recoup its Monday losses in early Tuesday trading.

The Wells Fargo Hybrid and Preferred Securities index finished 10 basis points higher. The index was down the same amount the previous day.

Despite the stronger tone, a trader said it was “really quiet.”

“I’m hearing there are two [new] deals possibly next week,” he said. “People are probably waiting to see what the [Federal Reserve] says.”

The Fed begins meeting Tuesday to discuss its monetary policy and whether or not to raise interest rates. The meeting concludes Wednesday, at which time the central bank will announce its decisions and give an update on its view of the economy.

As for recent deals, Bank of America Corp.’s $900 million of 6% series EE noncumulative preferreds – a deal priced April 18 – listed on the New York Stock Exchange on Tuesday.

The ticker is “BACPA.” Paper was trading at $25.14 early in the session, up from opening levels of $25.13. While the preferreds traded up to as high as $25.17, they ended slightly softer at $25.12.

Customers Bancorp Inc.’s $50 million of 6.45% series E fixed-to-floating rate noncumulative preferreds were meantime “still” in a par to $25.05 range, according to a trader.

That issue priced Thursday.

Zions firm on tender

Zions Bancorporation said late Monday that it was tendering for up to $120 million of its preferreds, including up to $35 million of its $125.22 million outstanding 5.8% $1,000-par series I fixed/floating-rate noncumulative perpetual preferred stock, up to $55 million of its $195.15 million outstanding 7.2% $1,000-par series J fixed/floating-rate noncumulative perpetual preferred stock and up to $30 million of its $171.83 million outstanding 6.3% $25-par series G fixed/floating-rate noncumulative perpetual preferred stock (NYSE: ZBPG).

In response to the news, the latter issue moved up 26 cents to $26.65. The preferreds had gained 30 cents, or 1.14%, to $26.63 in early trades.

Each offer will remain open until 11:59 p.m. ET on May 20. The offer range is $955 to $980 for the series Is, $1,055 to $1,080 for the series Js and $26.30 to $26.85 for the depositary shares representing the series Gs. For each series, Zions will select the lowest price within the applicable offer range that will allow it to stay at or below the cap for that series.

The company will also pay accrued dividends up to but excluding the settlement date, which is expected to be May 24.

Zions is a Salt Lake City-based bank holding company.

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