CHS deal viewed as ‘attractive’; JPMorgan up as profit narrows; Wells Fargo mixed

By Stephanie N. Rotondo

Phoenix, Jan. 14 – The preferred stock market was soft as the midweek trading session began, following the common equity markets lower.

The common stock space was weaker in response to lower-than-expected retail sales figures for December, which were seen declining 0.9% overall. Expectations were that the key data point would dip just 0.1%.

The Wells Fargo Hybrid and Preferred Securities index ended the day down 1 basis point. The index was down 8 bps at mid-morning.

Meanwhile, CHS Inc.’s newly priced $450 million issue of 7.5% class B series 4 cumulative redeemable preferreds freed to trade by the end of business, according to a market source.

The source quoted the issue at $24.92 bid, $24.98 offered.

“It was priced to move,” a trader said. “It looks fantastic.”

“It’s very attractively priced for everybody that knows the name,” the trader said.

The deal came Tuesday via BofA Merrill Lynch and Wells Fargo Securities LLC.

Meanwhile, in the secondary market, JPMorgan Chase & Co. and Wells Fargo & Co. put out fourth-quarter results, kicking off the latest round of bank earnings.

JPMorgan posted a 6.6% decline in its quarterly profit, citing legal costs of more than $1 billion. That news initially took most of the bank’s preferred issues lower, though they recovered to finish the day up.

Wells Fargo meantime saw a 1.8% gain in profit, attributed to stronger loan growth. But Wells Fargo’s preferreds were mixed in trading.

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