Morning Commentary: Valley National plans new noncumulative issue; Fannie, Freddie continue to gain

By Stephanie N. Rotondo

Seattle, July 26 – Another new preferred stock issue hit the tape early Wednesday as Valley National Bancorp announced an offering of series B noncumulative preferreds.

Price talk is 5.5%, according to a market source.

Keefe Bruyette & Woods Inc. is running the books.

The Wayne, N.J.-based bank holding company plans to use the proceeds for general corporate purposes and investments in Valley National Bank.

As for the secondary space, the market was trading mixed after two days of losses.

The Wells Fargo Hybrid and Preferred Securities index was down 5 basis points. The U.S. iShares Preferred Stock index, however, was up 5 bps.

Fannie Mae and Freddie Mac’s preferreds continued to dominate trading, as the paper remained on an upward course.

The Fannie 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 25 cents, or 3.52%, at $7.35. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) – the more active of the two issues – were up 22 cents, or 3.29%, at $6.90.

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