Midday Commentary: Preferreds head higher in early trading; primary expected to stay quiet

By Stephanie N. Rotondo

Phoenix, July 9 - Preferred stocks were rebounding in Tuesday trading, after starting the week with a softer tone.

The 30-year Treasury bonds were also inching up slightly.

One trader noted that PPL Electric Utilities Corp. had brought a 4.75% $1,000-par first mortgage bond late Monday, an issue that was mostly being traded on investment-grade desks. The trader said the coupon was "absolutely insane."

"I would have thought that it should have at least a five handle," he said, adding that investors might be better off with an Entergy piece of $25-par listed paper that was trading at least 100 basis points better.

Still, the new issue calendar in the preferred realm remained inactive, and that trend was likely to continue.

"I doubt we'll see anything for the next week or more," he said.

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