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Morning Commentary: Market shakes off China fears; Citigroup plans new issue; Qwest notes free up
By Stephanie N. Rotondo
Seattle, Jan. 26 – Preferred stocks were rallying early Tuesday as the market shook off concerns about China.
“People aren’t scared,” a trader said, adding that a bounce in oil prices was also likely fueling the rebound.
The Wells Fargo Hybrid and Preferred Securities index was up 22 basis points at mid-morning.
The primary market continued to see deals added to the calendar as Citigroup Inc. announced a $500 million offering of series S noncumulative perpetual preferreds.
Price talk is around 6.375%, according to a trader.
The trader saw the issue at $24.77 in the gray market.
Citigroup Global Markets Inc. is the bookrunning manager. Joint lead managers include BofA Merrill Lynch, Morgan Stanley & Co. LLC, Goldman Sachs & Co., RBC Capital Markets LLC, Wells Fargo Securities LLC, J.P. Morgan Securities LLC and UBS Securities LLC.
Proceeds will be used for general corporate purposes.
Among other recent deals, Qwest Corp.’s $235 million of 7% $25-par notes due 2056 – a deal from Monday’s business – freed to trade early in the session, a trader said.
He pegged the notes at $24.82 bid, $24.85 offered.
From last week’s deals, Bank of America Corp.’s $1 billion of 6.2% series CC noncumulative preferreds were quoted at $24.90 bid, par offered, while Wells Fargo & Co.’s $875 million of 5.7% class A series W noncumulative perpetual preferreds were seen at $24.95 bid, par offered.
BofA brought its deal on Thursday and is trading with a temporary ticker of “BKRRP.” Wells Fargo came Jan. 19 and is trading under “WLGGP” for the time being.
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