Bank of America’s new preferreds continue to lead secondary trading; HSBC active, mixed

By James McCandless

San Antonio, May 9 – Traders reported a high level of activity in the secondary market for preferreds on Wednesday as Bank of America Corp.’s new issue continues to attract interest.

Bank of America’s new 6% series GG non-cumulative preferred stock continues to dominate volume on its second day in the market.

HSBC Holdings plc’s preference shares were mixed after the company issued a redemption notice for two of the securities on Friday.

AT&T, Inc.’s $25-par notes traded up as the company awaits a decision in its antitrust case over its attempted merger with Time Warner.

Bank of America’s new issue

Bank of America’s $1.2 billion issue of 6% series GG non-cumulative preferred stock continued to dominate the preferred market in volume on Wednesday, with about 3.5 million preferred shares changing hands.

The deal, announced Monday morning, matched earlier talk of a 6% dividend.

The notes will be callable after five years.

The preferreds rose 1 cent to close at $25.02.

HSBC mixed

HSBC’s 8.125% and 8% perpetual subordinated capital securities exchangeable non-cumulative dollar preference shares ended Wednesday mixed. The company announced last Friday that both issues would be redeemed on June 4.

The 8.125% shares lost 1 cent to close at $25.22 with about 337,000 shares traded.

The 8% shares gained 1 cent to close at $25.41 with about 458,000 shares traded.

AT&T rises

AT&T’s 5.35% global notes due 2066 rose as the company awaits a ruling on whether or not the company is allowed to merge with Time Warner. The Department of Justice filed an antitrust case against the company, alleging that the proposed merger would harm consumers.

The notes, trading at a volume of about 198,000, rose 9 cents to close at $24.84.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index lost 0.08%, trimming some of the 0.11% loss seen earlier in the day.

The iShares US Preferred Stock ETF was level at $36.97.

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