Morning Commentary: Market expected to be muted ahead of holiday; recent deals trade up

By Stephanie N. Rotondo

Seattle, Aug. 29 – Preferred stock traders were forecasting a quiet week ahead of Labor Day weekend.

“There is nothing moving,” a trader said. “I think it will be like this for the rest of the week.”

The market opened Monday’s session a touch softer, with the Wells Fargo Hybrid and Preferred Securities index trading down 1 basis point. However, despite the slight decline, issues priced during August continued to gain momentum.

Qwest Corp.’s $977.5 million of 6.5% $25-par notes due 2026 (NYSE: CTBB) – consisting of $850 million sold on Aug. 11 and a fully exercised greenshoe of $127.5 million – were dominating the day in early trading, rising 9 cents to $25.76.

Legg Mason Global Asset Management’s $500 million of 5.45% $25-par junior subordinated notes due Sept. 15, 2056 (NYSE: LMHB) were meantime seen ticking up 3 cents to $25.04.

That deal came Aug. 3.

Among Entergy-linked deals, Entergy Louisiana LLC’s $270 million of 4.875% $25-par collateral trust mortgage bonds due Sept. 1, 2066 (NYSE: ELC) were pushing up 7 cents to $24.94, while Entergy Arkansas Inc.’s $410 million of 4.875% $25-par first mortgage bonds due Sept. 1, 2066 (NYSE: EAI) were 3 cents better at $24.97.

Entergy Louisiana priced Aug. 10. Entergy Arkansas came Aug. 9.

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