Fed’s stress test shows banks passing muster; preferreds firm; Hancock’s notes below par

By Stephanie N. Rotondo

Phoenix, March 5 – The preferred stock market was firm but quiet on Thursday as investors prepared for the Federal Reserve’s stress test results.

The results came out after the market closed and showed that all of the 31 big U.S. banks had passed the test, meaning each one has sufficient capital reserves to weather another financial downturn.

It was the first time since the tests began in 2009 that all of the banks met or exceeded the minimum threshold requirements.

Another trader opined that the weather in New York was keeping people away from their desks, thus the limited trading activity.

The Wells Fargo Hybrid and Preferred Securities index ended 4 basis points better. The index was up 7 bps at mid-morning.

Though the secondary was trending positively, Hancock Holding Co.’s $150 million of 5.95% $25-par notes due 2045 was not, a trader reported.

The trader saw the new deal – which came Monday and freed to trade Tuesday – at $24.55 bid, $24.65 offered.

“The manager didn’t really come in and support it,” he said.

Morgan Stanley & Co. LLC was the bookrunner.

Ahead of the Fed’s release of the stress test results, the six largest U.S. banks saw their preferreds trending mostly higher on the day.

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