Preferred stocks inch higher; Huntington Bancshares busy, steady; Entergy New Orleans up

By Stephanie N. Rotondo

Seattle, March 21 – The preferred stock market was muted in Monday trading as investors readied for a shortened holiday week.

While overall liquidity was toward the lighter side, the space continued to be strong, with the Wells Fargo Hybrid and Preferred Securities index moving up 10 basis points at mid-morning. However, as the dollar strengthened and Treasuries yields improved, the index settled back in to finish up just 2 bps.

Huntington Bancshares Inc.’s $350 million of 6.25% series D noncumulative perpetual preferreds – a deal priced March 14 – continued to dominate trading, according to a market source.

“It was one of the most active issues,” he said, deeming the paper flat at $25.24.

Earlier in the session, the preferreds were seen at $25.15 bid, $25.25 offered.

A trader said the deal had not yet listed on the Nasdaq Global Select Market – the ticker is expected to be “HBANO” – but he noted that the issue was slated to settle Monday, so listing should come “in the next couple of days.”

Among other recent deals that have not yet listed, Entergy New Orleans Inc.’s $110 million of 5.5% $25-par first mortgage bonds due 2066 were pegged at $26.15 at the close, a gain of 30 cents on the day.

However, a source said the pop looked like a “last-minute market manipulation,” calling the volume weighted average price of $25.70 more accurate.

The source also noted that volume in the issue was starting to fade.

“There is such a demand for utilities, they tend to go away fast,” he said.

The notes were quoted wide at $25.55 bid, $25.77 offered in early trading.

That issue came Tuesday.

KKR & Co. LP’s 6.75% series A noncumulative perpetual preferred units were also getting attention as a trader saw the issue being offered at par at mid-morning.

By the close, a source said the paper was steady at $24.95.

The $300 million issue came March 10. On Thursday, the company said its greenshoe had been fully exercised, increasing total issuance by $45 million to $345 million.

As for the current week’s calendar, a trader was not expecting it to be gangbusters.

“No one has heard of any deals yet,” he said.

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