Morgan Stanley, Allstate exercise over-allotments; CHS admitted to Nasdaq, trades up

By Stephanie N. Rotondo

Phoenix, Sept. 27 - Preferred stocks were finishing the week on the softer side as the Wells Fargo Hybrid and Preferred Securities index dipped 15 basis points by midday.

By the end of the day, the index had dropped 36 bps.

A trader said Morgan Stanley & Co. Inc.'s $750 million of 7.125% series E fixed-to-floating rate noncumulative preferreds were greenshoed early in the day, adding $112.5 million to the total issuance.

He quoted the issue at $25.25 bid, $25.30 offered. However, after the bell a market source said the issue closed down 12 cents at $25.15.

The deal priced Tuesday.

Also greenshoed on Friday was the Allstate Corp.'s $350 million of 6.75% series C fixed-rate noncumulative perpetual preferreds, a deal that priced Monday.

The company sold an additional 1.4 million shares, or $35 million, bringing total issuance to $385 million.

"It was trending up a touch throughout the day," a source said of the preferreds, seeing them moving up "close to par."

The source also noted that the issue was the day's most actively traded security.

Meanwhile, CHS Inc.'s $250 million issue of series 1 class B cumulative redeemable preferreds - a deal that came Sept. 12 - listed on the Nasdaq under the ticker symbol "CHSCO." A trader said once the deal listed, "it immediately went to a $28.50 premium."

However, paper backed off a little but was still up on the day. As of midday, the preferreds were up $1.09, or 4.12%, at $27.55.

At the close, the paper was up $1.13, or 4.27%, at $27.59.

On Monday, Citigroup Inc.'s $900 million of 7.125% fixed-to-floating rate series J noncumulative perpetual preferred stock is expected to list on the New York Stock Exchange under the symbol "CPJ."

A source said the preferreds finished the session up 6 cents at $25.30. Earlier in the day, a trader had pegged the issue at $25.25 bid, $25.30 offered.

The deal priced Sept. 12.

Overall, the trader said trading had quieted down as the week was coming to a close.

"I think everybody has made their positions for next week," he said, noting that Monday was both month- and quarter-end. He opined that investors might play the waiting game as the government debates whether or not to raise the debt ceiling.

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