State Street sells new preferreds; Prudential notes free to trade; Principal ends mixed

By Stephanie N. Rotondo

Phoenix, May 14 – The preferred stock market continued to climb higher as the Wells Fargo Hybrid and Preferred Securities index rose 33 basis points in Thursday trading.

State Street Corp.’s 5.9% series D fixed-to-floating rate noncumulative preferreds (NYSE: STTPD) were active, with more than 1 million shares trading. The activity in the issue came as the Boston-based bank brought a benchmark offering of series F fixed-to-floating rate noncumulative perpetual preferreds.

The issue ended at $25.66, off 8 cents.

A total of $750 million of the new $1,000-par preferreds were sold at par to yield 5.25%. The dividend will be fixed until Sept. 15, 2020, at which point they will begin floating at Libor plus a spread.

After pricing, a market source quoted that issue at 100.375 bid, 100.625 offered.

Separately, the market focused on Prudential Financial Inc.’s new $1 billion of 5.375% $1,000-par fixed-to-floating rate junior subordinated notes due 2045.

The Prudential issue priced late Wednesday. A trader said the notes freed to trade early in the session. At the close, another source pegged the issue at 100.73.

Meanwhile, Principal Financial Group Inc. announced late Wednesday that it was redeeming all of its outstanding 5.562% series A noncumulative perpetual preferreds and its 6.518% series B noncumulative perpetual preferreds on June 30.

Come Thursday, the series B shares (NYSE: PFGPB) were off 8 cents at $25.35. The series A preferreds (OTCBB: PFGZP) were meantime up 7 cents at $101.17.

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