Preferred stocks end week strong; Bank of America’s new issue hits par; CHS continues to climb

By Stephanie N. Rotondo

Phoenix, Jan. 23 – The preferred stock market was bucking the trend of the broader markets Friday as it climbed higher.

The Wells Fargo Hybrid and Preferred Securities index closed 20 basis points better.

Investors remained focused on Bank of America Corp.’s $1 billion of 6.5% series Y noncumulative preferreds, a deal that priced Tuesday and freed to trade late Wednesday.

A trader said the new deal was “moving up to $25 bucks.”

Paper was trading at $24.92 early in the day, up 7 cents from the previous close. Over 2.25 million shares had already traded.

By the end of the day, the issue was firmly at par, and more than 5 million shares had been exchanged.

Meanwhile, CHS Inc.’s $450 million of 7.5% class B series 4 cumulative redeemable preferreds (Nasdaq: CHSCL) – a deal that priced Jan. 13 – continued to gain momentum, rising a penny to $25.79.

At mid-morning, the paper was up a nickel to $25.83. The high of the day was $25.90.

However, investors weren’t paying much attention to deals priced by Harvest Capital Credit Corp. and CorEnergy Infrastructure Trust Inc. on Thursday.

A trader said he had not yet seen any markets for Harvest’s $25 million of 7% $25-par notes due 2020. As for CorEnergy’s $50 million of 7.375% series A cumulative redeemable preferred stock, he saw that bid for at $24.60.

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