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Morning Commentary: Preferred stocks ‘uneventful’ mid-morning; Saratoga, KeyCorp improve
By Colin Hanner
Chicago, Dec. 16 – Activity was muted in the preferred sphere on Friday morning, with one trader calling activity “uneventful,” as companies were issuing announcements on their dividends rather than stirring wide movement in the market.
The Wells Fargo Hybrid and Preferred Securities index was up 28 basis points at mid-morning, and the iShares U.S. Preferred Stock ETF was up 23 bps, building on the high-volume momentum the ETF reached on Thursday.
One of those companies that was grabbing headlines was the Dow Chemical Co. (NYSE: DOW), which gained approval to convert $4 billion of its series A convertible preferred stocks into common equity shares on Dec. 30.
Berkshire Hathaway Inc. bought 3 million preferred shares of Dow in April 2009.
“It’ll be interesting to see what happens there,” a trader said.
In new issues, Saratoga Investment Corp.’s $65 million of 6.75% $25-par notes due 2023 – a deal priced Wednesday –were trading with a $24.70 bid, $24.80 offer, a trader said.
KeyCorp’s $500 million of 6.125% series E fixed-to-floating rate noncumulative perpetual preferred stock (NYSE: KEYPrI), which listed on the New York Stock Exchange on Thursday, was up 3 cents to $25.38.
A trader saw the stock trading at $25.37.
Though quiet, the secondary market appeared to be on the up-and-up.
Public Storage’s 4.9% $25-par series E cumulative preferred shares (NYSE: PSAPrE) were up 5 cents to $20.68 at mid-morning.
JPMorgan Chase & Co.’s 5.50% $25-par series O depository noncumulative preferreds (NYSE: JPMPrD) were up 14 cents to $24.07, while the banking and financial services company’s 6.1% $25-par series AA depository noncumulative preferreds (NYSE: JPMPrG) were up 4 cents to $25.13.
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