Preferred stocks slacken post-holiday; rumored new deal this week; RBS plans big bonuses

By Stephanie N. Rotondo

Phoenix, Dec. 2 - Preferred stocks were trending lower after the long holiday weekend, though a trader said the dip was "nothing material."

"The bond market is off, so we're off," he said.

Another market source said liquidity was "very light," adding that some desks were still empty and that others were "getting up to speed" after the long weekend.

"I would expect a Monday after the long Thanksgiving weekend to be light," he said. Nearly every market was softer on the day, he noted.

"Tomorrow should be busier," he opined.

The Wells Fargo Hybrid and Preferred Securities index was down 12 basis points at mid-morning. At the close, it was down 27 bps.

One trader said that he had not heard of any new deals slated for the week. Another source said he was hearing rumors of a deal, possibly for later in the week.

"It wouldn't surprise me," he said, especially given that November's issuance for $25-par securities was "the quietest month of the year."

Royal Bank of Scotland Group plc was weaker early in the day as it was being reported that the Edinburgh-based bank was moving forward with large banker bonuses despite continued losses and scandals.

The total bonus pool was up to £500 million.

The 5.9% noncumulative guaranteed trust preferred securities (NYSE: RBSPE) were 2 cents weaker shortly before midday, trading at $21.13. However, the issue finished the day flat at $21.15.

Though the market was taking a downward tilt, some of the day's most actively traded securities managed to put on some gains.

Citigroup Inc.'s 6.875% series K fixed-to-floating rate noncumulative preferreds (NYSE: CPK) moved up 4 cents, ending at $25.11. BB&T Corp.'s 5.2% series F noncumulative perpetual preferreds (NYSE: BBTPF) were also up that amount, closing at $19.08.

Wells Fargo & Co.'s 5.2% series N class A noncumulative perpetual preferreds (NYSE: WFCPN) meantime finished a penny higher at $20.72.

Following the broader trend, ING Group NV's 7.2% perpetual debt securities (NYSE: INZ) dipped a penny to $25.20.

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