'Fiscal cliff' concerns keep investors at bay; Kimco prices deal; Prudential, Webster free

By Stephanie N. Rotondo

Phoenix, Nov. 28 - Overall trading in the preferred stock market continued to be subdued Wednesday, and a trader said it was due to uncertainties surrounding the "fiscal cliff."

"It could be a nightmare," he said, if a deal cannot get done by the end of the year. As such, many investors were taking profits and waiting it out.

"We've had a strong run this year," the trader pointed out, noting that there was no need at this point for investors to be aggressive.

Still, the primary market remained active.

Kimco Realty Corp. said it was planning issuance of class K cumulative redeemable perpetual preferred stock. The deal priced after the close, coming upsized at $175 million and at the low end of talk.

Meanwhile, Prudential Financial Inc. and Webster Financial Corp. priced deals late Tuesday, though details of those offerings were not filed until Wednesday morning.

Prudential brought $500 million of 5.75% $25-par junior subordinated notes due Dec. 15, 2052. That was upsized from an expected $250 million, and price talk had been 5.75% to 5.875%.

Webster then issued $110 million of 6.4% series E noncumulative perpetual preferreds.

Price talk was around 6.5%.

Kimco prices new issue

Kimco Realty sold $175 million of 5.625% class K cumulative redeemable preferreds after the market closed Wednesday.

"It seems to be doing relatively well," a trader said ahead of pricing, seeing the paper offered at $24.65 in the gray market at midday.

Another market source said that level sounded "a little on the low ide. It shouldn't be at that big of a discount."

However, he noted that the market is dealing with "a lot of supply," so it wasn't impossible that it was the right price.

Kimco is a New Hyde Park, N.Y.-based real estate investment trust.

Prudential, Webster free up

Both Prudential Financial and Webster Financial's new deals freed by the end of the day, but it was the Prudential deal that was dominating trading.

At midafternoon, a trader quoted Prudential's notes at $24.55 bid, $24.65 offered and saw the Webster preferreds offered at $25.04.

As for the decent trading difference between the two issues, the trader noted that Webster was an investment grade-rated name and that it was a smaller deal with a better coupon.

After the bell, a source said Prudential closed at par, though he said that the volume weighted average price of $24.79 was closer to the "real price" of the day.

MetLife drops, rallies

MetLife Inc.'s 6.5% series B noncumulative preferreds (NYSE: METPB) were trading busily, getting crushed only to come back by day's end.

Paper trader as low as $25.26, but ended the day up 2 cents at $25.36.

As for the declines earlier in the day, a source remarked that the issue is "trading at outrageous yields.

"I'd call it profit-taking," he said.

He also noted that the issue was currently callable at par, leaving its yield to call in negative territory.

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