Preferred stock issuance quiet as market absorbs new deals; American Homes frees to trade

By Stephanie N. Rotondo

Seattle, April 20 – After a steady string of new issues, the preferred stock primary market quieted down on Thursday.

“We probably won’t see any more deals this week,” a trader said. He added that the market likely wants to “get things cleaned up” before launching more new issues.

From Wednesday’s business, American Homes 4 Rent’s $150 million of 5.875% series F cumulative redeemable preferreds freed to trade in late morning, according to a market source.

At the close, the source quoted the paper at $24.75 bid, $24.85 offered, adding that the deal was “obviously” not well received.

The preferreds were seen at $24.80 bid, $24.85 offered at mid-morning, prior to freeing from the syndicate.

The deal came upsized from $100 million and at the tight end of the 5.875% to 6% price talk.

Qwest Corp.’s $575 million of 6.75% $25-par notes due 2057 – a deal priced Tuesday and freed to trade on Wednesday – were meantime seen trading up to par by the bell.

Earlier in the day, the notes were trading in a $24.75 to $24.80 context, according to a trader.

BofA, Morgan Stanley, RBC Capital Markets and Wells Fargo led that deal, which came upsized from $250 million and in line with price talk.

And, Wells Fargo & Co.’s $600 million issue of 5.625% series Y class A noncumulative preferreds finished the session at $25.08, up 3 cents.

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