AT&T preferreds up as company awaits anti-trust decision; Citigroup down

By James McCandless

San Antonio, May 1 – Traders reported an active and positive day in the preferred market Tuesday with news driving much of the activity.

AT&T, Inc. preferreds rose as its anti-trust trial against the Department of Justice concludes and the company awaits a decision.

Citigroup Inc. preferreds led in volume, leading traders to think that notes will be redeemed in the near future.

Energy Transfer Partners, LP’s new preferred units climbed.

AT&T awaits decision

AT&T’s 5.35% global notes due 2066 rose after Monday’s closing arguments between the company and the Department of Justice capped off a high-profile anti-trust trial over whether the company’s attempted merger with Time Warner would be harmful to consumers.

Lawyers for the government indicated that an “alternative solution” would be viable and that the presiding judge might not find it necessary to block the merger outright.

The company is facing another anti-trust probe over alleged cooperation with Verizon to make it difficult for customers to switch wireless carriers.

With about 182,000 shares exchanged, the preferreds gained 30 cents to close at $24.88.

Citigroup down

Traders saw Citigroup’s 7.875% fixed-to-floating rate trust preferred securities trading up Tuesday, leading some to speculate that after redemption announcements from Bank of America Corp. and General Electric Co., the securities could be next.

The securities traded around 955,000 shares, quadrupling their normal volume.

“We think the higher volume may be a market player estimating whether or not it makes sense for Citigroup to redeem this trust preferred after Bank of America's announcement last night,” a trader said.

The securities lost 15 cents to close at $26.24.

Energy Transfer down

Energy Transfer’s recently priced $450 million of series C fixed-to-floating rate cumulative redeemable perpetual preferred units were in high demand, trading about a third of their normal volume at around 372,000 shares.

The deal was priced after market close a few weeks ago with a 7.375% dividend attached.

The units gained 4 cents to close at $24.86.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index gained 0.09% at the end of trading after rising 0.06% in early trading Tuesday.

The iShares US Preferred Stock ETF rose 20 cents to close at $36.97.

© 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.