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Morning Commentary: Preferreds ticking higher; Charles Schwab preferreds get temporary symbol
By Stephanie N. Rotondo
Phoenix, July 29 – The preferred stock market continued to firm up early Wednesday as the market waited to see what news would come out of the Federal Reserve’s two-day policy meeting.
Popular opinion is that the Fed will opt to raise interest rates in September. But with the recent weakness in the markets and new economic data being disappointing, some have begun to speculate that the increase might not occur until December.
The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points at mid-morning.
The Charles Schwab Corp.’s $600 million of 6% series C noncumulative perpetual preferreds – a deal priced Monday – was assigned a temporary trading symbol early in the day, a trader reported.
The symbol is “CSABP.”
The preferreds remained over par, though they were coming in a bit from Tuesday’s closing levels.
A trader pegged the issue at $25.03 bid, $25.08 offered. The preferreds had ended Tuesday’s session around $25.10.
BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC ran the books.
Meanwhile, JPMorgan Chase & Co.’s $1.1 billion issue of 6.15% series BB noncumulative preferreds was holding at its recent highs, with a trader quoting the issue at $24.86 bid, $24.88 offered.
That deal came July 22 via J.P. Morgan Securities LLC.
Also in the primary arena, the market is awaiting to hear details on IberiaBank Corp.’s offering of series B fixed-to-floating rate noncumulative preferreds, which was first announced Tuesday.
A trader said he had heard the deal would price Wednesday but had yet to see it launch.
BofA Merrill Lynch and UBS Securities are leading the deal.
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