Morning Commentary: Preferreds mixed; E*Trade Financial markets deal; Wells Fargo dips

By Cristal Cody

Tupelo, Miss., Nov. 27 – Preferred stocks opened mixed on Monday following the Thanksgiving Day holiday.

The Wells Fargo Hybrid and Preferred Securities index fell 2 basis points over the morning.

The U.S. iShares Preferred Stock ETF was up 6 bps.

Deal action is expected in the preferred stock market over the week.

E*Trade Financial Corp. announced plans on Monday to tap the primary market.

In trading at the start of the session, Wells Fargo & Co.’s 8% series J non-cumulative perpetual class A preferred shares (NYSE: WFCPrJ) were down 16 cents, or 0.61%, to $26.09.

The preferred stock has traded heavily since mid-November after investors realized it would not be called on its first optional call date, according to market sources. The preferreds have a call date of Dec. 15, 2017.

E*Trade Financial to price

E*Trade Financial plans to price series B fixed-to-floating rate non-cumulative perpetual preferred stock, according to a 424B5 filing with the Securities and Exchange Commission on Monday.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the bookrunners.

The company does not plan to list the depositary shares or preferred stock on any securities exchange or interdealer market quotation system.

Proceeds will be used to fund E*Trade’s acquisition of Trust Company of America, Inc. and for general corporate purposes.

E*Trade is a New York City-based financial services company that provides online brokerage and related products and services.

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