Preferred stock market beats broader trend, ends higher; recently priced deals holding up

By Stephanie N. Rotondo

Phoenix, Aug. 3 – The preferred stock market was modestly higher Monday despite weakness seen in the broader markets.

The Wells Fargo Hybrid and Preferred Securities index drove up 8 basis points by the bell, or 2 cents on average for $25-par paper.

Despite the day’s positive start, a trader lamented that it was “very quiet” in terms of trading.

And while it was “a light volume day,” according to a second market source, investors continued to focus on recently priced deals.

From Wednesday’s business, IberiaBank Corp.’s $75 million of 6.625% series B fixed-to-floating rate noncumulative preferreds were seen bid for at $24.80 early in the day but ended at $25.01, up 2 cents on the day.

That issue came upsized from $50 million, with BofA Merrill Lynch and UBS Securities LLC leading the deal. On Thursday, the preferreds were assigned a temporary symbol, “IBBRP.”

The Charles Schwab Corp.’s $600 million of 6% series C noncumulative perpetual preferreds were then pegged at $25.23 at the close by one source.

Another source called the issue up 4 cents at $25.19.

A trader had seen the preferreds at $25.15 at mid-morning.

JPMorgan Chase & Co.’s $1.1 billion of 6.15% series BB noncumulative preferreds – a deal priced July 22 via J.P. Morgan Securities LLC – were quoted at $24.93 bid, $24.98 offered, closing at $24.92, off 8 cents.

The paper began trading with a temporary symbol, “JMPRP,” on July 27.

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