Midday Commentary: Preferreds begin month with firm tone; GE, Vornado new issues list on NYSE

By Stephanie N. Rotondo

Phoenix, Feb. 1 - Though the preferred stock market spent most of the week on the soft side, a trader said Friday that the first day of the new month saw a bit of an upward bounce.

Zions Bancorporation's newly priced 6.3% series G fixed-to-floating rate noncumulative perpetual preferreds - a $171.8 million deal that priced at auction on Thursday - was seen trading at $25.10 at midday.

The issue will remain fixed until March 15, 2023, at which time it will begin to float at a rate equal to three-month Libor plus 424 basis points.

In other recent deals, two issues listed on the New York Stock Exchange on Friday: General Electric Capital Corp.'s $550 million of 4.875% $25-par senior notes due 2053 - a deal that came Jan. 22 - and Vornado Realty Trust Inc.'s $300 million of 5.4% series L cumulative redeemable preferreds, which came Jan. 17.

As of midafternoon, the GE issue (NYSE: GEH) was at $25.02, up 2 cents from the open, while the Vornado securities (NYSE: VNOPL) were at $24.74, down 8 cents from the previous session.

Meanwhile, in the secondary, Wells Fargo & Co. said that it was redeeming all of its 7.875% enhanced trust preferreds (NYSE: BWF) on March 15 at par plus accrued dividends.

"That's a pretty big deal, so we may see a [new] deal from them," a trader said.

The paper was trading at $25.27.

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