HSBC preferreds decline as redemption date nears; Bank of America improves with market

By James McCandless

San Antonio, May 24 – Traders reported a muted day in preferred trading in anticipation of the long holiday weekend.

HSBC Holdings plc’s preference shares declined as the redemption date for its 8% and 8.125% securities inches closer.

Bank of America Corp.’s recent 6% series GG non-cumulative preferred stock continued its run among the most-active preferred issues this week.

Legacy Reserves LP’s series B fixed-to-floating rate cumulative redeemable perpetual preferred units dived again.

HSBC heads lower

HSBC’s 8.125% and 8% perpetual subordinated capital securities exchangeable non-cumulative dollar preference shares traded down with about 1,248,000 and 1,845,000 shares changing hands, respectively.

The company announced recently that both issues would be redeemed on June 4.

The 8.125% shares (NYSE: HSEA) lost 24 cents to close at $25.00.

The 8% shares (NYSE: HSEB) declined 4 cents to close at $25.36.

Bank of America up

Bank of America’s recent $1.2 billion issue of 6% series GG non-cumulative preferred stock (NYSE: BACPrB) continued to take a leading position in preferred stock trading with about 913,000 shares trading.

The deal came to market a few weeks ago and has regularly been among the most active issues.

The preferreds were up 9 cents to close at $25.35.

Legacy Reserves sinks

Legacy Reserves’ 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units fell again with about 399,000 shares exchanged.

The units have been in decline as traders expect the company to forego payment on its quarterly dividend.

The units (Nasdaq: LGCYO), which have a $25.00 liquidation preference, lost $1.34 to close at $8.86.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index closed up 0.61%, increasing the 0.06% gain in early trading.

The iShares US Preferred Stock ETF closed up 12 cents to $37.15.

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