Morning Commentary: PNC Financial to sell $1,000-par preferreds; People’s United still strong

By Stephanie N. Rotondo

Seattle, Oct. 27 – Despite ongoing weakness in the preferred stock market, the primary space continued to push out new deals on Thursday.

PNC Financial Services Group Inc. announced an offering of $1,000-par series S fixed-to-floating rate noncumulative perpetual preferreds.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and PNC Capital Markets LLC are running the books.

At mid-morning, a trader said he had yet to hear any price talk or see any markets for the planned deal.

“There’s just really nothing going on,” he said. “The long bond is off 2 points. People must be sensing inflation someplace.”

As for the Wells Fargo Hybrid and Preferred Securities index, it was off 18 basis points at mid-morning.

As for the week’s other new deals, People’s United Financial Inc.’s $250 million offering of 5.625% $25-par series A fixed-to-floating rate noncumulative preferreds continued to trade at a significant premium.

A trader quoted the issue at $26.18 bid, $26.30 offered.

The deal came Monday and upon pricing immediately jumped well over par. One trader speculated that it was a manager covering a short position, though another source said it was due to the 10-year non-call structure.

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