Morning Commentary: Preferreds firm ahead of Fed statement; oil’s slide pressures energy issues

By Stephanie N. Rotondo

Phoenix, March 18 – Preferred stocks were slightly higher early Wednesday as a trader noted that “bonds are up a little bit and oil is down again.”

Of the latter, he said that was putting pressure on some energy names.

The trader also opined that Associated Banc-Corp. could be planning a deal after the bank filed a shelf registration covering debt securities, common stock, preferred stock, depositary shares, warrants and units. He saw the company’s existing 8% series B perpetual preferreds (NYSE: ASBPB) trading at $26.70.

“If they bring a deal, it will probably be around 7%,” he said.

Among recently priced issues, AmTrust Financial Services Inc.’s $165 million of 7.5% $25-par series D noncumulative preferreds were pegged at $24.90 bid, par offered.

The deal came March 11 and freed to trade the next day.

Hancock Holding Co.’s $150 million of 5.95% $25-par notes due 2045 – a deal from March 2 – were meantime quoted at $23.75 bid, $24.25 offered.

“As soon as it lists, it will pop up,” a trader said, though he added that the issue had still not been assigned even a temporary symbol.

Though the early market had a firm tone, liquidity remained weak as investors prepared for the Federal Reserve’s latest policy statement. The announcement is expected to come later in the day upon the conclusion of the central bank’s two-day meeting.

The Wells Fargo Hybrid and Preferred Securities index was up 3 basis points at mid-morning.

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