Morning Commentary: Primary space slows down, looks to clean up week’s deals; American Homes holds

By Stephanie N. Rotondo

Seattle, April 20 – After a steady string of new issues, the preferred stock primary market quieted down on Thursday.

“We probably won’t see any more deals this week,” a trader said. He added that the market likely wants to “get things cleaned up” before launching more new issues.

From Wednesday’s business, American Homes 4 Rent’s $150 million of 5.875% series F cumulative redeemable preferreds were seen at $24.80 bid, $24.85 offered at mid-morning.

That was unchanged from the last gray market seen on Wednesday.

The deal came upsized from $100 million and at the tight end of the 5.875% to 6% price talk. BofA Merrill Lynch, Raymond James & Associates Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC ran the books.

Qwest Corp.’s $575 million of 6.75% $25-par notes due 2057 – a deal priced Tuesday and freed to trade on Wednesday – were meantime seen in a $24.75 to $24.80 context, according to a trader.

BofA, Morgan Stanley, RBC Capital Markets and Wells Fargo led that deal, which came upsized from $250 million and in line with price talk.

And, Wells Fargo & Co.’s $600 million issue of 5.625% series Y class A noncumulative preferreds were quoted at $25.10 bid, $25.12 offered in early dealings.

The Wells Fargo-led offering came Monday, upsized from $250 million and tighter than the 5.875% price talk. The deal then freed to trade on Tuesday and was also assigned a temporary trading symbol, “WFGGP.”

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