Preferreds begin with firm tone; Wells Fargo’s new issue upsized; Fannie, Freddie improve

By Stephanie N. Rotondo

Phoenix, Sept. 8 – Preferred stocks were modestly higher in Tuesday trading as market players returned to their desks after the long Labor Day weekend.

The Wells Fargo Hybrid and Preferred Securities index ended 6 basis points higher.

“It was not exactly inspiring today,” a market source said of the day’s movements.

The source also remarked that volume was not overly impressive, opining that most of the session’s activity was centered on a new deal from Wells Fargo & Co.

The San Francisco-based bank brought $900 million of 6% series V class A noncumulative perpetual preferreds on Tuesday. The company initially said it was selling at least $250 million of the shares, talked in a 6% to 6.125% range.

A trader pegged the issue at $24.80 later in the day, while a second source quoted the preferreds at $24.80 bid, $24.84 offered.

Wells Fargo Securities LLC is the bookrunner. Joint lead managers include BofA Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co., UBS Securities LLC, RBC Capital Markets, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC.

Meanwhile, a preferred stock trader said that Fannie Mae and Freddie Mac paper might pick up ground this week, as the discovery process in a lawsuit against the federal government is slated to conclude at the end of the week.

In Tuesday trading, the preferreds were in fact inching upward.

© 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.