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Morning Commentary: Preferreds strengthen in early trades; Valley National gets temporary symbol
By Stephanie N. Rotondo
Phoenix, June 18 – Preferred stocks were edging higher early Thursday as investors reacted positively to the Federal Reserve’s latest policy statement.
The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points at mid-morning.
Wednesday afternoon, the Federal Open Market Committee concluded its two-day policy meeting, electing to keep rates steady for the time being. However, it indicated that economic data appeared strong enough to warrant an interest rate increase later in the year.
Despite the overall firm tone of the market, a trader said secondary trading remained constrained.
Valley National Bancorp’s new $115 million of 6.25% series A fixed-to-floating rate noncumulative preferreds – a deal priced Tuesday – were seen “hovering” in a $24.87 to $24.90 area, according to one trader.
However, another source placed the issue at $24.92, down 8 cents from the previous close, but up from opening levels of $24.88.
The deal – which came via Sandler O’Neill + Partners LP, Keefe Bruyette & Woods Inc. and RBC Capital Markets – freed to trade on Wednesday and was also assigned a temporary trading symbol, “VLNBP.”
However, AmTrust Financial Services Inc.’s $150 million of 7.25% $25-par junior subordinated notes due 2055 – a deal from June 11 – still had yet to receive a temporary symbol, a trader said.
The trader noted that the paper – which had been gaining ground earlier in the week – was “not really moving,” pegging it in a $24.80 to $24.82 context.
That deal was led by Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods.
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