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Midday Commentary: Wells Fargo announces offering; calendar expected to heat up; BofA calls issues
By Stephanie N. Rotondo
Phoenix, March 15 - A new preferred stock offering from Wells Fargo & Co. was "the big thing" on Friday, a trader remarked.
"It's kind of odd that they are bringing a deal on a Friday," he said. "That would lead me to believe that we have a very strong new issue market."
The trader added that once all the banks "clear their stress tests," more new issues - and probably more redemptions - would be on the horizon.
Wells Fargo said it intended to sell at least $250 million of series P class A noncumulative perpetual preferred stock. Price talk is 5.25% to 5.375%, according to a trader.
The trader saw the preferreds at $24.65 in the midday gray market.
As for redemptions, the trader noted that Fifth Third Bancorp and Bank of America Corp. both announced plans to call issues.
For its part, BofA is calling $5.5 billion of preferreds, including the 8.2% series H noncumulative perpetual preferreds (NYSE: BACPH) and the 8.625% series 8 noncumulative perpetual preferreds (NYSE: BMLPQ).
The Hs were down 18 cents at midafternoon, trading at $25.47. The 8.625% preferreds were down 14 cents, also at $25.47.
Meanwhile, both Pitney Bowes Inc.'s recent $375 million issue of 6.7% $25-par notes due 2043 and PS Business Parks Inc.'s $100 million of 5.7% series V cumulative preferreds listed on the New York Stock Exchange on Friday.
The Pitney issue priced Feb. 26. Paper was trading at par post-listing. The symbol is "PBIPB."
PS Business Parks' came March 5 and was trading down 16 cents from Thursday's close at $24.64.
The ticker is "PSBPV."
And, Interstate Power & Light Co.'s new $200 million issue of 5.1% series D cumulative perpetual preferreds freed to trade Friday, after pricing on Thursday.
A trader saw the securities at par bid, no offer.
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