Morning Commentary: Preferred stock trading subdued; KeyCorp steady; deal flow eyed

By Stephanie N. Rotondo

Seattle, Dec. 9 – The preferred stock market was muted as Friday’s session began.

“I think it’s going to be a sleepy day,” one trader opined.

Despite the limited liquidity, the market was ticking up, after retreating for the last two trading days.

The market had started the week with a positive tone.

The Wells Fargo Hybrid and Preferred Securities index was up 11 basis points at mid-morning.

Even KeyCorp’s $500 million of 6.125% series E fixed-to-floating rate noncumulative preferreds were “not moving at all,” according to a trader.

The trader said the issue was “still hanging around” a $25.30 to $25.35 context.

The deal came Monday, upsized from $250 million and tight to the 6.25% area price talk. The issue freed from the syndicate on Tuesday and is trading under a temporary symbol, “KYYPP.”

There was, however, continued “chatter that we’ll see a couple [new deals] before the end of the year,” a trader said.

“But I think they will probably be small-ish,” the trader speculated.

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