Preferreds improve as Yellen sees rate hike this year; Qwest greenshoe partially exercised

By Stephanie N. Rotondo

Phoenix, Sept. 25 – Preferred stocks were moving up in early Friday trading as the market digested Federal Reserve chairman Janet Yellen’s speech late Thursday.

In the speech, Yellen indicated that the central bank had every intention of raising interest rates this year, given that economic indicators were improving.

Still, a trader said the speech resulted in “no follow through,” as the Fed chair “basically reiterated what [Stanley Fischer, vice chairman] said last week, that we will have liftoff this year.”

“There’s no new news,” the trader added. “It’s going in the right direction for them to do something. The question is when.”

The trader further opined that a rate hike would probably not come in October, though December seemed likely.

“It is what it is,” another market source said. “Personally, I hope they just go and get it over with instead of this Chinese water torture.”

The Wells Fargo Hybrid and Preferred Securities index rose 12 basis points by Friday’s bell.

Meanwhile, a $60 million greenshoe on Qwest Corp.’s $6.625% $25-par senior notes due 2055 (NYSE: CTZ) was partially exercised Friday, adding $10 million to the initial $400 million offering.

The notes finished the day firm, rising 12 cents to $24.99.

Meanwhile, the Monroe, La.-based telecommunications company’s 7.375% $25-par notes due 2051 (NYSE: CTQ) were also improving in active trading, closing up 3 cents to $25.72.

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