New preferred issues steady; market trades ‘pretty much flat’ early, improves by the bell

By Stephanie N. Rotondo

Seattle, Nov. 10 – Recent preferred stock deals were holding their ground in Tuesday trading, according to traders.

American Financial Group Inc.’s 6% $25-par subordinated debentures due 2055 – a $150 million deal that priced Monday and was upsized from $100 million – were pegged at $24.94 bid, $24.97 offered.

“That’s pretty much where it went out yesterday,” the trader said around mid-morning.

There was a little pop later in the afternoon, as another trader placed the paper in a $25.02 to $25.07 context.

In the company’s other outstanding issues, the 6.25% $25-par subordinated debentures due 2054 (NYSE: AFGE) improved 9 cents to $26.24.

BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC were the joint bookrunners.

As for Citigroup Inc.’s 6.125% $1,000-par series R fixed-to-floating rate noncumulative perpetual preferred stock, it was “hanging right around” 100.125 bid, 100.25 offered, a trader said.

A second trader saw the preferreds around 100.25 as well.

That $1.5 billion issue came Thursday via Citigroup Global Markets Inc.

As for the 7.875% fixed-to-floating rate trust preferred securities (NYSE: CPN), they were up 18 cents at $25.65.

As for the secondary, a trader said things were “pretty much flat” at mid-morning.

The Wells Fargo Hybrid and Preferred Securities index was gyrating in early trades, falling 2 bps, then coming back to even and then rising 2 bps. The index ultimately closed up 24 bps, stemming losses seen Monday and Friday.

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