Midday Commentary: Citigroup brings new noncumulative deal to market; preferreds soften

By Stephanie N. Rotondo

Phoenix, Feb. 5 - Citigroup Inc. added a deal to the preferred stock forward calendar on Wednesday, announcing a $250 million offering of fixed-rate series L noncumulative perpetual preferreds.

Price talk is around 6.875%, according to a trader.

The trader noted that there was no selling group, seeing the paper at $24.60 bid in the early gray market. By comparison, Citigroup's 6.875% series K fixed-to-floating rate noncumulative preferreds (NYSE: CPK) were trading at $25.13, and though down 12 cents, it "shows the attraction of the fixed to float option."

Citigroup Global Markets Inc. is leading the deal. BofA Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint lead managers.

Overall, the preferred market was coming in during the mid-week session.

The Wells Fargo Hybrid and Preferred Securities index was off 9 basis points at mid-morning.

"Our market is pretty flat," a trader said. "There's nothing really moving it one way or another."

The trader commented that he had thought the new deal would stir up some action, but alas, it did not.

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