Morning Commentary: Preferred stocks soften; PNC frees to trade; recent deals at, above par

By Stephanie N. Rotondo

Seattle, Oct. 28 – It was slow going in early Friday trading in the preferred stock market, a trader reported.

“It’s light, but slightly down in secondary trading,” he said, “which it should be, with the bond market selling off.”

The Wells Fargo Hybrid and Preferred Securities index was down 13 basis points at mid-morning.

PNC Financial Services Group Inc.’s $525 million of 5% $1,000-par series S fixed-to-floating rate noncumulative preferreds feed to trade in early dealings, according to a trader.

The deal came Thursday, upsized from $500 million and in line with the revised 5% talk. Initial price talk was 5.125%.

A trader said the paper was “right around par,” in a 99.875 to 100.125 context.

From Tuesday, M&T Bank Corp.’s $500 million of 5.125% $1,000-par series F fixed-to-floating rate noncumulative perpetual preferred stock was “still hovering above par,” a trader said, at 100.5.

And from Monday’s business, People’s United Financial Inc.’s $250 million offering of 5.625% $25-par series A fixed-to-floating rate noncumulative preferreds were pegged at $26.20 bid.

“They left a lot of money on the table,” a trader said, referring to the new issue’s sizable run-up since pricing.

And, Charles Schwab Corp.’s $600 million of 4.625% $1,000-par series E fixed-to-floating rate noncumulative preferreds – also priced Monday – were quoted at 99.625 bid, par offered.

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