Morning Commentary: Preferred market cools, but tap continues to flow; Wells Fargo tops par

By Stephanie N. Rotondo

Seattle, June 10 – The new issue market took a break on Friday, though a trader said more deals were expected on the horizon.

“Those last two deals didn’t get the reception everyone was hoping for,” he said, referring to Seaspan Corp.’s $100 million of 8.2% series G cumulative redeemable preferreds and Western Alliance Bancorporation’s $175 million of 6.25% subordinated debentures due 2056. “We are supposed to see more deals coming, but I just don’t know how quickly they will come behind this stuff.”

He added that the recently priced deals might need to be “put away” before any other issues come to market.

Among the recent issues, Western Alliance’s debentures were not yet free to trade, a trader said. He added that he thought the securities would free on Monday.

He pegged the issue at $24.65 in early trading.

As for the Seaspan deal, he had yet to see any markets as of mid-morning.

From Wednesday’s business, Wells Fargo & Co.’s $1 billion of 5.5% series A class A noncumulative preferreds were pegged at $25.05 bid, $25.10 offered.

Maiden Holdings Ltd.’s $110 million of 6.625% $25-par notes due 2046 – a deal from Tuesday – were meantime seen at $24.90 bid, par offered.

And, Validus Holdings Ltd.’s $150 million of 5.875% series A noncumulative preference shares were in a $24.75 to $24.87 context.

In addition to a stream of more new issues next week, a trader said investors would likely be focusing on a slew of economic data due out. The Federal Reserve’s policy meeting is also next week.

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