Bank of America’s new issue dominates preferred market; HSBC preferreds end lower

By James McCandless

San Antonio, May 8 – The preferred market saw an increase in activity as Bank of America Corp.’s new issue hit the market.

Bank of America’s $1.2 billion of 6% series GG non-cumulative preferred stock entered the market, dominating secondary trading volume.

HSBC Holdings plc’s preferreds traded down after the company issued a redemption notice for two preferred securities on Friday.

U.S. Bancorp’s preferreds fell, the latest name to receive attention in a preferred market focused on financial firms.

Bank of America’s new $1.2 billion issue of 6% series GG non-cumulative preferred stock entered the market on Tuesday with about 12 million shares changing hands.

The deal, announced Monday morning, priced on top of talk of a 6% dividend.

The preferreds will be callable after five years.

Dividends are payable quarterly beginning Aug. 16.

The preferred stock gained 8 cents to close at $25.01.

Meanwhile, HSBC’s 8.125% and 8% perpetual subordinated capital securities exchangeable non-cumulative dollar preference shares declined on Tuesday. The company announced last Friday that both issues would be redeemed on June 4, 2018.

The 8.125% shares lost 4 cents to close at $25.23 with about 747,000 shares traded.

The 8% shares lost 4 cents to close at $25.40 with about 1,334,000 shares traded.

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