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Preferred stocks strong at midweek; liquidity still muted; GSE preferreds buck trend
By Stephanie N. Rotondo
Seattle, Dec. 21 – Despite the continued dip in liquidity, preferred stocks remained on an upward course in midweek trading.
The Wells Fargo Hybrid and Preferred Securities index finished up 55 basis points, after being up 21 bps at mid-morning.
The index added 11 bps on Tuesday and 37 bps on Monday.
Of the day’s most actively traded issues, Fannie Mae and Freddie Mac once again topped the list – even though neither name reached above 1 million shares.
Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) slipped 6 cents to $7.90, while Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) declined 24 cents, or 3.14%, to $7.41.
Other busy issues included Wells Fargo & Co.’s 5.5% series X class A noncumulative preferreds (NYSE: WFCPrX), which rose 31 cents, or 1.37%, to $22.97.
Qwest Corp.’s 6.5% $25-par notes due 2056 (NYSE: CTBB) were also on the active side, relatively speaking. The issue ended 7 cents higher at $22.75.
Rounding out the active traders, Morgan Stanley & Co. Inc.’s 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPrI) firmed 12 cents to $26.19.
In early dealings, Capital One Financial Corp.’s 6.25% series C noncumulative perpetual preferreds (NYSE: COFPrC) were trading actively, though that died down by the end of the session.
The issue closed up 20 cents at $25.12.
KeyCorp’s 6.125% series E fixed-to-floating rate noncumulative perpetual preferreds (NYSE: KEYPrI) – a $500 million deal that priced Dec. 5 – were meantime initially 4 cents higher at $25.63, though they eventually closed unchanged at $25.59.
The issue listed on Dec. 15.
Charles Schwab Corp.’s 5.95% series D noncumulative perpetual preferreds (NYSE: SCHWPrD) were another gainer, adding 25 cents, or 1%, to $24.705.
Going into year-end, a trader speculated that trading volumes would continue to lighten.
“It’s pretty quiet,” he said.
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