Preferred stock trading slows to end quiet week; Selective Insurance preferreds list

By Andrea Heisinger

New York, Feb. 22 - A sleepy week in the preferred stock market continued on Friday morning as sources reported there wasn't much activity.

"It's very quiet," one trader said at midday. "The market's trending up, but not by a lot - not even a penny."

By late afternoon, the scene had not changed much, and volume remained light, with the market "largely flat" to up 3 basis points, or not quite a penny, a source said.

The last new preferred stock issue in the market was on Feb. 14, and trading volume has mostly remained light since then.

The primary and secondary markets need to digest the heavy supply from January and the beginning of February, the trader said, adding that was especially true of $25 par issues.

"That will turn, but most of the stuff getting done right now is in euros - $1,000 par and hybrids - but there's still demand," the trader said.

One of the most active bonds of the morning was a 5.2% series C noncumulative perpetual preferred from Bank of New York Mellon Corp., a trader said. The bank had priced $550 million of the preferreds on Sept. 12, 2012.

"That's the most active, with maybe one or two accounts though," he added. "Otherwise, it's mostly the Fannie [Mae], Freddie [Mac] complex."

A recent issue from Selective Insurance Group Inc. (NYSE: SGZA) was listed and seen around $24.82, a trader said in late afternoon prior to the close.

The company priced $175 million of 5.875% $25-par 30-year preferreds on Feb. 6.

"Nothing's really moving," he added. "Everything's just kind of sitting around par."

The trader said that it could partly be because of the winter storm that hit the Midwest on Thursday and Friday and also because it was the end of the week and a lot of people were of doing other things.

The most active preferreds of the day were heavy on bank names.

A trader saw the Wells Fargo & Co. 8% series J shares as the most active as of 3:30 p.m. ET. There were 595,000 shares trading, up 4 cents to $29.50.

Next up was a Citigroup Inc. series N preferred with 591,000 preferred shares trading, up 12 cents on the day to $28.02, followed by a PNC Financial Services Group Inc. 6.125% fixed-to-floating rate series P preferred which was down 1 cent on the day to $27.51, with 363,000 shares changing hands.

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