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Morning Commentary: Preferreds up in early trading; Bank of America preferreds inch higher
By Stephanie N. Rotondo
Seattle, April 28 – Preferred stocks were firm in early Thursday trading, albeit amid limited trading volume.
The Wells Fargo Hybrid and Preferred Securities index was up 9 basis points at mid-morning.
The gains came after the Federal Reserve said on Wednesday that it was holding interest rates steady for the time being. But the central bank’s statement included enough ambiguity to allow it room to adopt or reject a rate hike come June.
The policy decision was due to continuing low inflation in the United States, despite other signs that point to economic recovery. Concerns about the global economy and Britain’s possible exit from the European Union were also factors.
As for early dealings, Bank of America Corp.’s $900 million of 6% series EE noncumulative perpetual preferreds (NYSE: BACPA) easily dominated trading in an otherwise subdued session.
Just over 350,000 preferreds had been traded as of mid-morning, with the paper rising 2 cents to $25.221.
Meanwhile, Customers Bancorp Inc.’s $50 million of 6.45% series E fixed-to-floating rate noncumulative perpetual preferreds were pegged in a $25.05 to $25.12 area.
The issue priced April 21.
Talk of new issues for next week continued to circulate.
“I am hearing a big deal for Monday or Tuesday,” a trader said, though he did not have any specifics.
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