Preferred stocks reverse course following two days of heavy losses; Gabelli deal prices

By Stephanie N. Rotondo

Seattle, June 28 – The preferred stock market was rebounding Tuesday, following the trend of the broader markets.

The Wells Fargo Hybrid and Preferred Securities index closed 93 basis points better. The index was up 62 bps at mid-morning, after closing down 53 bps on Monday and as many points on Friday after it was learned that the United Kingdom had voted to leave the European Union.

As uncertainties abound about what the Brexit means, chatter is that Tuesday’s gains were due to the previous losses being overdone.

As for trading, both European and domestic banks were regaining ground.

Among European financials, Barclays Bank plc’s 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) improved by 59 cents, or 2.36%, to $25.62. Royal Bank of Scotland Group plc’s 7.25% series T noncumulative dollar preference shares (NYSE: RBSPT) rose 51 cents, or 2.07%, to $25.67.

In Deutsche Bank AG paper, the 7.6% trust preferred securities (NYSE: DTK) were 73 cents higher, or 2.93%%, at $25.39.

The primary market saw one deal hitting the tape on Tuesday, as Gabelli Dividend & Income Trust brought $100 million of 5.25% series G cumulative preferreds.

Price talk was 5.25% to 5.375%, according to a market source.

Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were the joint bookrunners. G. research LLC was the co-manager.

Gabelli is a Rye, N.Y.-based investment firm.

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