Morning Commentary: Bank of America to price preferreds; Morgan Stanley shares firm post-earnings

By Stephanie N. Rotondo

Phoenix, Jan. 20 – The primary preferred stock market seemed to be ramping up Monday as Bank of America Corp. announced an offering of $25-par series Y noncumulative perpetual preferred stock.

Additionally, a trader said he was hearing a business development company planned to launch a deal this week as well.

As for the BofA new issue, price talk was in a 6.625% area. But with early gray market quotes in a $24.78 to $24.82 context, a trader speculated that “they are going to cut price talk and grow the deal.”

BofA Merrill Lynch is leading the deal.

Proceeds will be used for general corporate purposes.

In the secondary arena, Morgan Stanley & Co. Inc.’s preferreds were ticking higher after the New York-based bank reported a rise in its fourth-quarter profit.

However, the profit came in below estimates, and fixed-income trading revenue was down 14% year over year.

The 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI) were up a nickel in early trading at $25.51.

Overall, the preferred market was softer as the shortened holiday week kicked off.

The Wells Fargo Hybrid and Preferred Securities index was down 14 basis points at mid-morning.

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