Morning Commentary: Preferred stock market remains on upward track, though liquidity wanes

By Stephanie N. Rotondo

Seattle, March 18 – The preferred stock market continued to tick higher in early Friday trading, though volume remained thin, a trader said.

“Everything is slightly green, the market keeps getting bid up,” he said.

And while the new issue pipeline was less active this week than in recent weeks – due in large part to the Federal Reserve’s policy meeting that concluded on Wednesday – “I assume we will be getting some more deals, things seem pretty favorable,” the trader commented.

The Wells Fargo Hybrid and Preferred Securities Index was up 24 basis points at mid-morning.

Among recently priced deals, Huntington Bancshares Inc.’s $350 million of 6.25% series D noncumulative perpetual preferreds were pushing up to a $25.15 to $25.20 context, according to a trader.

The deal came Monday.

From Tuesday’s new issue market, Entergy New Orleans Inc.’s $110 million of 5.5% $25-par first mortgage bonds due 2066 continued to pop, trading up to $25.60.

And from the previous week, KKR & Co. LP’s $300 million of 6.75% series A noncumulative perpetual preferred units were quoted at $24.90 bid, $25.05 offered.

A trader speculated that “those should be listing soon.”

Huntington’s preferreds are also expected to hit an exchange in the coming week. KKR will be admitted to the New York Stock Exchange while Huntington will trade on the Nasdaq Global Select Market.

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