Morning Commentary: Preferred stocks soften; Sterling launches $200 million notes

By Cristal Cody

Tupelo, Miss., Oct. 28 – Preferred stocks opened Wednesday mostly softer along with equities as the rising number of Covid-19 infections pressures the financial markets.

The U.S. iShares Preferred Stock ETF declined 37 cents, or 0.99% to $36.40.

The Wells Fargo Hybrid and Preferred Securities index was down 17.07, or 0.68%.

Equities were down across the indices. The Dow Jones industrial average fell 2.85%, the S&P 500 dropped 2.78% and the Nasdaq declined 2.81% over the morning.

Meanwhile, one issuer is marketing an offering.

Sterling Bancorp launched $200 million of fixed-to-floating rate subordinated notes due 2030 (Kroll: BBB) in the primary market on Wednesday.

Bank of America up

Deal volume week to date includes $1.1 billion of 4.375% $25-par perpetual non-cumulative preferreds (Baa3/BBB-/BBB) that priced on Tuesday from Bank of America Corp.

Initial price talk on Bank of America’s preferreds was in the 4.625% area.

The preferreds, admitted for temporary trading under the symbol “BACPL,” opened Wednesday at $25.05 on trading volume of 6.1 million shares.

Bank of America plans to apply to list the depositary shares representing the series NN preferreds on the New York Stock Exchange under the symbol “BACPrO.”

Other financial supply this week includes Bank of New York Mellon Corp.’s $582.5 million of 3.7% series H $1,000-par noncumulative perpetual preferred shares (Baa1/BBB/BBB+) that priced on Monday.

The preferreds priced tighter than talk in the 3.875% area.

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