Preferreds respond ‘pretty well’ to Fed minutes; JPMorgan gyrates; National General prices

By Stephanie N. Rotondo

Phoenix, June 18 – Preferred stocks firmed up in midweek trading.

A market source said the “market responded pretty well to the [Federal Reserve’s] minutes,” in which the central bank said it had trimmed its bond repurchase program to $35 billion from $45 billion the month before.

The Fed cited an improving economy as the basis for its decision on the stimulus trimming.

The Wells Fargo Hybrid and Preferred Securities index was up 19 basis points at the bell. At mid-morning, it had been up 7 bps.

But while the market was up on the day, the source noted that it was “a quiet day in front of the Fed [announcement]. Not a lot of people wanted to transact.

Though the market had a firm tone, JPMorgan Chase & Co.’s $850 million of 6.3% series W noncumulative perpetual preferreds continued to languish below par.

A source said the issue was gyrating throughout the day. “First it traded down; then it traded up,” he said.

He said the preferreds closed at $24.73, which was up 3 cents from the previous trading day. However, he said the volume weighted average price of $24.697 was probably a more accurate level.

National General Holdings Corp. sold $55 million of 7.5% series A noncumulative perpetual preferreds.

The new issue came at the tight end of talk.

Morgan Stanley & Co. LLC and UBS Securities LLC are the bookrunners.

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