Morning Commentary: Preferred stocks slightly higher; Hercules prices add-on; Customers on tap

By Stephanie N. Rotondo

Seattle, April 21 – The preferred stock market was modestly higher early Thursday, though a trader noted that overall activity was on the lighter side.

The Wells Fargo Hybrid and Preferred Securities index was up 3 basis points at mid-morning.

With the Women’s Syndicate Association’s annual spring luncheon kicking off in New York, it was largely expected that trading would slow down toward the end of the week.

And even though it was expected that the primary space would go silent as a result, a couple of smaller deals were getting done.

Hercules Capital Inc. – formerly Hercules Technology Growth Capital Inc. – said it sold an additional $65.4 million of its 6.25% $25-par notes due 2024 (NYSE: HTGX), lifting the total outstanding amount to $169.4 million.

The notes were trading up a penny to $24.84 in early trading.

Keefe Bruyette & Woods Inc., Jefferies LLC and RBC Capital Markets LLC were the joint bookrunning managers. Sandler O’Neill + Partners LP was lead manager, and BB&T Capital Markets and Janney Montgomery Scott LLC were co-managers.

Meanwhile, Customers Bancorp Inc. announced plans to sell at least $40 million of series E fixed-to-floating rate noncumulative perpetual preferreds.

Price talk is around 6.5%, according to a market source.

UBS Securities LLC and Morgan Stanley & Co. LLC are leading the deal.

The bank’s 6.5% series D fixed-to-floating rate noncumulative perpetual preferreds (NYSE: CUBIPD) were softer on word of the new deal, slipping 24 cents to $25.25.

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