Bank of America’s recent 6% preferreds lead low-volume market; Legacy Reserves sinks

By James McCandless

San Antonio, May 17 – A low-volume day was reported by traders in the preferred market on an overall decline.

Bank of America Corp.’s recent 6% series GG non-cumulative preferred stock led the preferred market in volume again.

Legacy Reserves LP’s 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units traded down.

Wells Fargo & Co.’s 6.625% series R fixed-to-floating rate non-cumulative perpetual class A preferred stock also declined.

Bank of America edges up

Bank of America’s recent $1.2 billion issue of 6% series GG non-cumulative preferred stock claimed the top spot in volume in the preferred market once again on Thursday with about 1,199,000 shares trading.

The deal came to market last week and has routinely placed first in volume for preferred stock.

The preferreds rose 1 cent to close at $25.13

Legacy Reserves falls

Legacy Reserves’ 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units saw a multi-point drop with about 390,000 shares exchanged.

“This usually happens when people are expecting the company to not pay out its dividend,” a trader said. “This has been a problem for the company before.”

The units lost $2.42 to close at $12.50.

Wells Fargo loses

Wells Fargo’s 6.625% series R fixed-to-floating rate non-cumulative perpetual class A preferred stock declined with about 246,000 shares trading.

Reports on Thursday allege that the company has been altering customer information in its business banking unit.

“It’s never really clear how much preferreds are tied to a company’s day-to-day news,” a trader said. “But this stock took a bit of a hit today.”

The preferreds lost 7 cents to close at $27.55.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index fell 0.14% at market close on Thursday, widening from the 0.10% drop in early trading.

The iShares US Preferred Stock ETF lost 1 cent to close at $36.93.

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