Allstate’s new $500 million perpetual preferreds begin trading; AT&T preferreds see spike in activity

By James McCandless

San Antonio, March 27 – The preferred stock market saw an increase in activity Tuesday, traders said, as a new pricing hit the market.

Allstate Corp.’s new $500 million of $25-par perpetual preferred series G shares began trading on Tuesday.

AT&T, Inc. has seen a spike in activity in its “TBB” preferreds in the past few days.

Citigroup’s preferred N shares continued their run of activity for a second day.

Allstate deal trades

Allstate’s new upsized $500 million of $25 par series G fixed rate noncumulative perpetual preferred stock began trading Tuesday with a dividend of 5.625%.

The dividend will be paid quarterly starting June 15.

Monday price talk had pegged the deal at $200 million with a yield in the 5.625% and 5.75% range.

“Everyone is trading the new Allstate around,” a trader said. “That deal is doing very well.”

Traders spotted the new securities ending the day above par at $25.05.

AT&T sees activity

Trading higher over the last few days has been AT&T’s “TBB” preferred stock, picking up steam as the company’s trial against the Department of Justice begins over its attempted merger with Time Warner.

“It’s been gaining a bit over chatter that it may very well win its case in court,” a trader said.

The TBB preferreds rose $0.10 on the day to close at $25.24.

Citigroup trades again

Citigroup saw another busy day for its preferred N shares, despite volatility and a negative day for its common stock.

“Sometimes the preferreds like these follow the common stock, but these have been going their own way,” a trader said.

The preferred N shares closed up $0.09 on the day to close at $27.07.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index rose 0.10% on the day after reaching as high as 0.15% Tuesday morning.

The iShares US Preferred Stock ETF lost $0.03 to close at $37.40.

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