Preferred market stays on upward track, though liquidity wanes; recent deals trade strong

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 during the 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 ended up 27 basis points.

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 issue ended even higher than that, a market source said, placing the preferreds at $25.25.

The deal came Monday.

From Tuesday, 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.

However, the notes ultimately settled in, trading at $25.323, a source said.

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.

The units finished the session in the middle of that market at $24.95, according to one source.

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

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