Morning Commentary: Preferred stocks strong going into end of week; American Homes gets symbol

By Stephanie N. Rotondo

Seattle, April 21 – The preferred stock market was looking to hold on to its gains in early Friday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning. The U.S. iShares Preferred Stock ETF was up 6 bps.

Investors will likely be keeping an eye on the iShares ETF on Friday, given that a rebalance of the S&P U.S. Preferred Stock index will occur after the day’s close. The index is adding 12 issues and removing seven.

A trader did note that the preferred space was on the quiet side, as this weekend’s French election was being eyed. That race has been contentious, with at least four different candidates on the block, representing the far-left to the far-right and all points in between.

Looking to the coming week, the new issue market is expected to see at least one deal hitting the tape.

“I’m hearing a deal on Tuesday,” a trader said, though he had no specifics.

Of the current week’s deals, American Homes 4 Rent’s $150 million of 5.875% series F cumulative redeemable preferreds were given a temporary trading symbol on Friday, “AMHTP.”

The deal priced Wednesday and freed to trade on Thursday.

Paper was trading in a $24.77 to $24.85 context at mid-morning, according to one trader.

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 quoted at $24.77 bid, $24.80 offered.

A market source had seen the notes closing at par on Thursday.

And, Wells Fargo & Co.’s $600 million issue of 5.625% series Y class A noncumulative preferreds were pegged at $25.07 bid, $25.12 offered.

That issue came Monday, upsized from $250 million and tighter than the 5.875% price talk. The deal then freed to trade on Tuesday and was also assigned a temporary trading symbol, “WFGGP.”

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