Morning Commentary: Belgium bombings pressure preferred stocks; new issue calendar quiet for now

By Stephanie N. Rotondo

Seattle, March 22 – The preferred stock market was following the broader markets lower early Tuesday after a string of bombings hit Brussels.

The bombings – two of which occurred at the airport and another at a subway station, both during morning rush hour – were attributed to the recent arrest of Salah Abdeslam, a suspect in the massive attacks on Paris last year. However, no one has taken credit for the bombings.

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

“Treasuries are up on that [news],” a trader said. “It’s a flight to quality.”

The trader further opined that once the situation “settles down,” Treasuries could come back in.

As for the primary space, the deal flow remained nil on Tuesday, though a trader said he was “hearing there’s a busy calendar” next week.

As for recently priced deals that have not yet listed on their respective exchanges, Entergy New Orleans Inc.’s $110 million of 5.5% $25-par first mortgage bonds due 2066 “have really run up,” according to a trader, placing the issue at $25.70 bid, $25.87 offered.

That issue priced March 15.

Huntington Bancshares Inc.’s $350 million of 6.25% series D noncumulative perpetual preferreds – a deal priced March 14 – were inching higher as well, trading in a $25.30 to $25.40 context, a trader said.

And, KKR & Co. LP’s 6.75% series A noncumulative perpetual preferred units were pegged at $24.92 bid, par offered.

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