Morning Commentary: PS Business Parks’ new preferred stock gets temporary ticker; Wells Fargo firms

By Stephanie N. Rotondo

Seattle, Oct. 12 – The preferred stock market continued to be weak on Wednesday as investors waited to see the minutes from the Federal Reserve’s most recent policy meeting.

The market wants to see why Fed officials opted to keep interest rates steady for the time being, while leaving an increase on the table for December. Additionally, any dissents to the final decision will likely be eyed.

The Wells Fargo Hybrid and Preferred Securities index was off 14 basis points at mid-morning. The index closed down 60 bps on Tuesday.

PS Business Parks Inc.’s $165 million of 5.2% series W cumulative preferreds was seen at $24.58 bid, $24.66 offered in early trading.

The deal came Tuesday, upsized from $100 million and tighter than the 5.25% price talk.

BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the books.

A trader said the paper had already been assigned a temporary trading symbol, “PSBNL.”

Among financials, Wells Fargo & Co.’s 6% series V class A noncumulative preferreds (NYSE: WFCPV) were inching higher, rising 4 cents to $26.00 at mid-morning.

A trader said that as the San Francisco-based bank continues to reel from its fraudulent accounts scandal, there has been talk that the company will need to raise more capital – especially as it eyes a large maturity wall toward the end of 2017.

“So we could see a couple of deals from them in the next couple of months,” the trader said.

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