Midday Commentary: Winter storms impacting trading; new deal could come on heels of Morgan Stanley

By Stephanie N. Rotondo

Phoenix, Dec. 9 - As winter storms hit the East Coast, trading in the preferred stock market was muted early Monday.

Still, a trader said the market was "inching forward."

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points as of midmorning.

While there was no chatter of new deals coming this week, the trader speculated that the pipeline was not yet closed.

"That [Morgan Stanley & Co. Inc.] deal did so well, I wouldn't be surprised if we see something come out," he said.

The New York-based investment bank priced $850 million of 6.875% series F fixed-to-floating rate noncumulative preferred stock on Thursday. The deal came massively upsized from $250 million.

As of Monday morning, the issue was trading at $24.95 bid, par offered, according to a trader.

Meanwhile, Fifth Third Bancorp's $450 million of 6.625% series I fixed-to-floating rate noncumulative perpetual preferreds - a deal that came Wednesday and freed on Thursday - were seen in a $25.02 to $25.10 context.

The trader further remarked that issuers and underwriters might be waiting for the two issues to get cleaned up and put away before bringing another new deal.

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