Midday Commentary: Some losses retraced in preferred market; NextEra, Goldman most active

By Andrea Heisinger

New York, Nov. 16 - There was a bit more enthusiasm about the preferred stock market at midday Friday than there had been in previous days as some sectors took a hit amid weakness.

A trader said that "the market was stronger today. We're pretty close to completely erasing yesterday's losses, but we're still down."

He then added that "the extreme bloodletting has stopped."

There was light activity, as is typical for a Friday, although some recent issues were seen being actively traded.

The new $500 million of 5.125% junior subordinated debentures due 2072 priced on Wednesday by NextEra Energy Capital Holdings Inc. were the most actively traded preferred securities as of midday, a source said.

The $25-par notes had 1.5 million shares change hands after being freed to trade at about 9:15 a.m. ET. They were quoted at par, which "showed it was a well-priced deal" after only being freed to trade for two hours, the source said.

A recent 5.95% series I perpetual preferred from Goldman Sachs Group Inc. was the next most-active issue. About 750,000 shares had traded, with the $25-pars up 13 cents on the day to $24.50, a trader said. The preferreds were priced in a $750 million offering on Oct. 17.

Tuesday's $600 million sale of 5.125% noncumulative perpetual series O preferreds from Wells Fargo & Co. were up 13 cents on the day, seen at about $24.70 in late morning trading.

"The last trade was for $24.77, but that was a small size," a trader said. The Wells Fargo notes were quoted at $24.72 at midday on Thursday.

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