Midday Commentary: 'Fiscal cliff' concerns keep investors at bay; Kimco plans new deal

By Stephanie N. Rotondo

Phoenix, Nov. 28 - Overall trading in the preferred stock market continued to be subdued Wednesday, and a trader said it was due to uncertainties surrounding the "fiscal cliff."

"It could be a nightmare," he said, if a deal cannot get done by the end of the year. As such, many investors were taking profits and waiting it out.

"We've had a strong run this year," the trader pointed out, noting that there was no need at this point for investors to be aggressive.

Still, the primary market remained active.

Kimco Realty Corp. said it was planning issuance of class K cumulative redeemable perpetual preferred stock.

Price talk is 5.625% to 5.75%, a trader said, noting that the deal is expected to be at least $100 million.

"It seems to be doing relatively well," a trader said, seeing the paper offered at $24.65 in the gray market at midday.

Meanwhile, Prudential Financial Inc. and Webster Financial Corp. priced deals late Tuesday, though details of those offerings were not filed until Wednesday morning.

Prudential brought $500 million of 5.75% $25-par junior subordinated notes due Dec. 15, 2052. That was upsized from an expected $250 million, and price talk had been 5.75% to 5.875%.

Webster then issued $110 million of 6.4% series E noncumulative perpetual preferreds.

Price talk was around 6.5%.

A trader said the Webster deal had freed from the syndicate but that Prudential's deal had not.

The trader quoted Prudential's notes at $24.55 bid, $24.65 offered and saw the Webster preferreds offered at $25.04.

As for the decent trading difference between the two issues, the trader noted that Webster was an investment-grade-rated name and that it was a smaller deal with a better coupon.

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