Preferreds little moved by Fed announcement; Valley National frees up; RBS sees glitch

By Stephanie N. Rotondo

Phoenix, June 17 – A preferred stock trader said the market was “in a holding pattern” on Wednesday.

The Wells Fargo Hybrid and Preferred Securities index was flat at mid-morning but ended the session off 3 basis points.

The muted movement came as investors digested the latest announcement from the Federal Open Market Committee. Fed officials said that the U.S. economy looked to be recovering from a weak winter and that things appeared on track for an interest rate increase in September.

The committee forecast economic growth of 1.8% to 2% this year. However, that was down from previous estimates of 2.3% to 2.7% growth.

Despite lowering their guidance, a majority of Fed officials signaled their support of a hike later this year.

As for the day’s dealings, Valley National Bancorp brought $115 million of 6.25% series A fixed-to-floating rate noncumulative preferreds late Tuesday.

The deal came upsized from $110 million and in line with talk.

On Wednesday, a trader said the issue freed early in the day and was “moving up.”

He quoted the paper at $24.88 bid, $24.95 offered just ahead of the market’s close. Still, that was up from Tuesday’s levels of $24.70 to $24.77.

Meanwhile, Royal Bank of Scotland Group plc ran into trouble yet again on Wednesday as a computer glitch left about 600,000 electronic payments in the ether.

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