Preferreds start weak, end slightly better as Greek hopes wane; Valley National tops par

By Stephanie N. Rotondo

Phoenix, June 25 – Preferred stock investors continued to keep an eye toward Greece in Thursday trading.

“Between interest rates and Greece, I guess we’ll see what happens,” one market source remarked.

As hopes of a debt deal for the struggling nation waned, the preferred market was initially losing ground. But by the end of the day, it had ticked up a touch.

The Wells Fargo Hybrid and Preferred Securities index closed 2 basis points higher, though it was off 6 bps at mid-morning.

The early weakness came even despite a new report from the Commerce Department showing that consumer spending had gained nearly 1%, the biggest gain since August 2009.

“With the exception of maybe some headline risk from Greece, I think it’s going to be a boring day,” a trader opined.

That position proved to be accurate, as another source noted that liquidity continued to be muted.

“It was slightly worse than [Wednesday],” the source said.

Recently priced issues did show signs of strength on Thursday. A trader quoted Valley National Bancorp’s $115 million of 6.25% series A fixed-to-floating-rate noncumulative perpetual preferred stock at $24.90 bid, par offered.

The shares closed a nickel better at $25.04.

A trader pegged Wintrust Financial Corp.’s $125 million of 6.25% series D fixed-to-floating-rate noncumulative preferreds at $24.65 bid, $24.72 offered. Another source said the issue ended a penny higher at $24.69.

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