Morning Commentary: M&T Bank offers $1,000-par noncumulative issue; People’s deal remains strong

By Stephanie N. Rotondo

Seattle, Oct. 25 – The preferred stock market was firming up again early Tuesday, which was helping the primary market continue to push out deals.

The Wells Fargo Hybrid and Preferred Securities index was up 8 basis points at mid-morning.

M&T Bank Corp. said it was selling $500 million of $1,000-par series F fixed-to-floating rate noncumulative preferreds.

Price talk is 5.25%.

J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, RBC Capital Markets and UBS Securities LLC are running the books.

However, a trader said he had yet to see any gray market quotes for the paper by mid-morning.

The Buffalo, N.Y.-based bank plans to use the proceeds for general corporate purposes, which may include the redemption of the 6.875% series D noncumulative perpetual preferred stock.

As for Monday’s deals, People’s United Financial Inc.’s $250 million offering of 5.625% $25-par series A fixed-to-floating rate noncumulative preferreds continued to skyrocket, with a trader seeing the paper at $26.12 bid early in the day.

He opined that the massive jump over parity was due to the manager dealing with a large short position.

On Monday, a market source said the deal’s success was because of the 10-year non-call structure, which is unusual.

The deal came tight to the 5.875% price talk.

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