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Preferreds under pressure but cut losses by day’s end; Bank of America deals free to trade
By Stephanie N. Rotondo
Phoenix, Sept. 3 – Preferred stocks continued to come in during the midweek trading session but managed to narrow the loss by the end of the day.
In early trading, the Wells Fargo Hybrid and Preferred Securities index was down 21 basis points. However, it rallied some to finish the day off just 10 bps.
A trader said there were no new issues announced for the day, though he opined that the pipeline could build up.
“We might see a few more [deals] in the calendar this week and next week as more people get back from vacation,” he said.
From Tuesday’s business, Bank of America Corp.’s $1 billion of 6.625% $25-par series W noncumulative preferreds and its $2 billion of 6.25% $1,000-par series X fixed-to-floating rate noncumulative perpetual preferreds freed to trade in the second half of the day, according to a market source.
The source saw the $25-par paper at $24.92 bid, $24.97 offered and the $1,000-pars at par 7/8 bid 101.25 offered.
Both deals priced Tuesday via BofA Merrill Lynch. The $1,000-par issue begins to float on Sept. 5, 2024 at Libor plus 370.5 bps.
Meanwhile, Winthrop Realty Trust’s 9.25% series D cumulative redeemable preferred stock (NYSE: FURPD) dominated trading among paying securities, according to a market source.
The issue rose 6 cents to $25.60 on Wednesday on volume of more than 700,000 shares.
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