Morning Commentary: New issue calendar sees Citigroup adding a deal; AmTrust deal slated to free

By Stephanie N. Rotondo

Phoenix, March 13 – After the burst of new issues that hit the preferred stock market on Thursday, a trader said he “can’t believe it’s so quiet” in early Friday trading.

That being said, he expected that the space would “keep seeing a slew of bank deals coming in the next week and the rest of the month.

“It appears that there is enough pent-up demand that everything is getting swallowed up.”

Supporting that opinion was the news that Citigroup Inc. was launching an offering of $1,000-par series O fixed-to-floating rate noncumulative preferreds on Friday.

A trader said initial price talk was in the high-5% area.

Citigroup Global Markets Inc. is running the books.

Among the new deals priced Thursday, AmTrust Financial Services Inc.’s $165 million offering of 7.5% $25-par series D noncumulative preferreds were slated to free from the syndicate at 10:30 a.m. ET.

A trader saw the issue quoted at $24.72 bid, $24.77 offered in the early gray market.

In the $1,000-par arena, Bank of America Corp.’s $1.9 billion offering of 6.1% $1,000-par series AA fixed-to-floating rate noncumulative preferred stock was pegged around 100.5, while Morgan Stanley & Co. Inc.’s $1.5 billion of 5.5% series J fixed-to-floating rate noncumulative preferreds were seen “right around” 100.625 bid, 100.75 offered.

As for the secondary market, it was deemed “soft” by a trader.

The Wells Fargo Hybrid and Preferred Securities index was down 11 basis points at mid-morning.

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