Midday Commentary: Market inches higher amid muted liquidity; Morgan Stanley, Fifth Third active

By Stephanie N. Rotondo

Phoenix, Dec. 10 - Preferred stocks were starting Tuesday's session with a firm tone.

The Wells Fargo Hybrid and Preferred Securities index was up 12 basis points shortly before 11 a.m. ET.

Still, trading was on the light side and a trader said he had still not heard any talk of new deals.

Allstate Corp. said late Monday that it had priced more than $115 million of 6.625% series D noncumulative perpetual preferred stock via Incapital LLC's "Incapital Leopards" program, a program aimed at giving retail investors more access to the preferred space.

Allstate also said it was continuing to sell shares in the next few weeks. But one market source was skeptical.

"In [Goldman Sachs' 2014 credit outlook report released Nov. 26], it said Allstate planned to issue $1.5 billion of preferred stock over the next several months," the source said. "So $115 million is not very much. Maybe they will bring a more institutionally oriented fixed-to-float in the coming months, but I don't see them raising $1.5 billion in this Leopard format."

Last week's new issues remained active, however. Morgan Stanley & Co. Inc.'s $850 million of 6.875% series F fixed-to-floating rate noncumulative preferreds were "just below par," according to a trader, while Fifth Third Bancorp's $450 million of 6.625% series I fixed-to-floating rate noncumulative preferreds were "right at par."

Morgan Stanley priced on Wednesday and Fifth Third came Dec. 3.

Both issues already have reporting symbols, so the deals could soon be hitting the New York Stock Exchange.

"I would assume they would list Friday or the beginning of next week," a trader said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.