Midday Commentary: Investors focus on Europe, leave preferreds flat; PS Business to bring new deal

By Stephanie N. Rotondo

Phoenix, Sept. 5 - Preferred stocks were "pretty flat" as of midday on Wednesday, according to a trader.

"Nothing is really standing out as a big mover," he said. "I think a lot of people are still focused on what is going to happen in Europe in the next few days."

The market did see plans for new issue hit the tape, an offering of at least $100 million series U cumulative perpetual preferreds from PS Business Parks Inc.

"It seems to be doing well," a trader said, noting that price talk had been revised to 5.75% from 5.875%. "It's a good name, and we haven't had a deal in a week and a half." With new money coming in at the beginning of the month, investors are looking for ways to put that money to work, he said.

The trader pegged the new issue at $24.90 in the gray market.

Pricing is expected either later today or on Thursday.

The Glendale, Calif.-based real estate investment trust will apply to list the new securities on the New York Stock Exchange under the ticker symbol "PSBPU."

Bank of America Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Proceeds will be contributed to the company's operating partnership in exchange for preferred units of limited partnership that have substantially identical economic terms to that of the preferreds. The funds will be for general corporate purposes, which may include the repayment of outstanding debt, the redemption of preferred securities and the acquisition of commercial properties.

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