Midday Commentary: Market gains in early trading; Southern California Edison to sell trust shares

By Stephanie N. Rotondo

Phoenix, Feb. 27 - The preferred stock market remained on an upward track in early Thursday trading.

The Wells Fargo Hybrid and Preferred Securities index was up 14 basis points as of midday.

The primary continued to kick out new deals. Southern California Edison Co. announced plans to sell fixed-to-floating rate cumulative perpetual trust preference securities.

A trader commented that the deal was being marketed to institutional clients only.

Meanwhile, CHS Inc. revised is previously announced offering of series 2, class B cumulative redeemable perpetual preferreds, upping the deal to as much as $350 million.

The company had originally registered $250 million of the preferreds on Feb. 12.

Among recently priced deals, State Street Corp.'s new $750 million issue of 5.9% series D fixed-to-floating rate noncumulative preferreds were seen at $25.38 bid, $25.50 offered.

The deal priced Tuesday.

Meanwhile, the Allstate Corp.'s $650 million of 6.625% series E noncumulative preferreds - a deal that came Monday - were pegged at $24.80 bid, $24.89 offered.

In other news, Freddie Mac reported an $8.6 billion profit for the fourth quarter on Thursday. In response, the agency's preferreds - as well as those of sector peer Fannie Mae - were "all up 50 cents to 70 cents," a trader said.

Freddie's 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were up 81 cents, or 7.01%, at $12.36. Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose a buck, or 9.09%, to $12.00.

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