Morning Commentary: Preferreds firm; SunTrust plans $1,000-par deal; recent deals trade

By Stephanie N. Rotondo

Seattle, April 27 – The preferred stock market was slightly higher at mid-morning on Thursday, according to market indicators.

“It’s a steady ship right now,” a trader said.

The Wells Fargo Hybrid and Preferred Securities Index was up 3 basis points while the U.S. iShares Preferred Stock ETF was up 2 bps.

The primary space saw a deal hitting the tape, as SunTrust Banks Inc. said it was selling $1,000-par series G fixed-to-floating rate noncumulative preferreds.

Price talk is 5.25%, according to a market source.

Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Morgan Stanley & Co. LLC and SunTrust Robinson Humphrey are running the books.

However, the secondary wasn’t trading very actively, a trader noted.

Even NuStar Energy LP’s $350 million of 7.625% series B fixed-to-floating rate cumulative redeemable preferred units – a deal priced Tuesday – were deemed “somewhat quiet today” by a trader speaking on Thursday.

The units were quoted at $25.22 bid, $25.26 offered in early trading.

The paper is trading under a temporary ticker, “NUSRP.”

Meanwhile, Qwest Corp.’s $575 million of 6.75% $25-par notes due 2057 are expected to list on the New York Stock Exchange “any day now,” according to one trader.

That could come as soon as Friday, he said. The expected symbol is “CTDD.”

Leading up to listing, the notes were seen holding around $24.85.

The deal priced on April 18.

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