Morning Commentary: Preferred stock market opens lower; State Street new issue frees to trade

By Stephanie N. Rotondo

Seattle, April 5 – The preferred stock market was again weak as early Tuesday trading got underway, following the broader markets lower.

For its part, equities were seen falling amid a global sell-off that was spurred by concerns about growth and the impact of negative interest rates. However, the U.S. market had pared its losses by mid-morning, as service sector activity data indicated that growth might have been more than expected in the first quarter.

The Wells Fargo Hybrid and Preferred Securities index was off 16 basis points at mid-morning.

A trader said State Street Corp.’s $500 million of 5.35% series G fixed-to-floating rate noncumulative preferreds freed to trade early in the day.

He also noted that the issue had already been assigned a temporary reporting symbol, “SSTTP.”

He saw the new preferreds at $25.70.

“They really moved up,” he said.

The Boston-based bank brought the deal on Monday, upsized from $250 million and tight to the 5.625% price talk.

The dividend rate begins to float March 15, 2026 at Libor plus 370.9 bps.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC were the bookrunners.

Proceeds will be used for State Street’s acquisition of GE Asset Management, which was announced March 30.

Meanwhile, a trader said he was hearing there was a CoBank ACB deal in the works, though he had yet to see any details.

CoBank is a national cooperative bank serving rural areas.

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