Preferreds stage intraday comeback; pipeline seen as busy; recently priced deals in focus

By Stephanie N. Rotondo

Phoenix, Sept. 11 – The preferred stock market was marginally lower in early Friday trading but staged a comeback by the bell as it followed the trend of the broader equity markets.

One trader attributed at least some of the initial softness to the fact that “a lot of stuff went ex-dividend.”

The Wells Fargo Hybrid and Preferred Securities index closed up 4 basis points. The index was down 1 bp at mid-morning.

As for the day’s dealings, the week’s new issues remained in focus and chatter is that the pipeline will keep churning deals out.

“The word is we have an active calendar this month,” a trader said. “So we will see once we get through the Fed.”

The Federal Reserve is slated to meet next week and, depending on its interpretation of economic data, could raise interest rates.

Among the new deals, Qwest Corp.’s $400 million of 6.625% $25-par senior notes due 2055 – a deal priced late Thursday – had not yet freed to trade, according to a trader.

The trader pegged the issue at $24.55 bid, $24.57 offered.

The 6.125% $25-par notes due 2053 (NYSE: CTY) remained weak on the heels of the new deal, closing off 12 cents to $24.29.

Meanwhile, AmTrust Financial Services Inc.’s $125 million of 7.5% $25-par subordinated notes due 2055 – a deal priced Wednesday – freed up Friday morning, a trader reported.

That paper was quoted at $24.50 bid, $24.55 offered.

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