Morning Commentary: Preferred stocks rise in early trading; August’s new issues remain in focus

By Stephanie N. Rotondo

Seattle, Sept. 2 – The preferred stock market was looking to end the week on a high note early Friday.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning. However, the index had been as much as 7 bps better earlier in the morning.

As has been the case all week, the end of August combined with the end of summer weighed on trading activity. Of those issues that were moving about, deals priced in August remained in focus.

Legg Mason Global Asset Management’s $500 million of 5.45% $25-par junior subordinated notes due Sept. 15, 2056 (NYSE: LMHB) – priced Aug. 3 – were trying to regain the ground lost in the previous session, rising 3 cents by mid-morning to $25.10.

The paper had declined 9 cents in Thursday trading, following in line with the modestly weaker tone of the day.

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 meantime steady at $25.97, though at the open, paper was trading at $26.02.

Away from recent deals, Morgan Stanley & Co. Inc.’s 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI) were off 11 cents at $28.41 in early trading.

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