Preferreds lose early gains; GSEs remain firm; SunTrust frees; NuStar steady; Qwest lists

By Stephanie N. Rotondo

Seattle, April 28 – The preferred stock market attempted to ease higher in early Friday trading, but as the rest of the markets turned negative, so did preferreds.

The Wells Fargo Hybrid and Preferred Securities index closed the day down 3 basis points, though it was up 2 bps at mid-morning.

The U.S. iShares Preferred Stock ETF fell 4 bps but was up 5 bps earlier in the day.

A trader noted that volume was rather light, though he also pointed out that there was a glitch with the feeds for the over-the-counter and pink sheet exchanges. As such, issues like Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS), among others, were “halted and unquotable.”

The glitch was eventually fixed and trading in Fannie – as well as Freddie Mac – resumed.

The GSE-linked preferreds were continuing their upward climb, with Fannie’s 8.25% series S preferreds adding a dime, or 1.38%, to close at $7.33.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) firmed 33 cents, or 4.84%, to $7.15.

Additionally, the Women’s Syndicate Association’s annual spring reception was Thursday night, which tends to result in empty desks the following day, the trader remarked.

As for the week’s new issues, SunTrust Bank Inc.’s $750 million of 5.05% $1,000-par series G fixed-to-floating rate noncumulative preferreds were seen in a 100.125 to 100.375 context.

The issue priced Thursday and freed in early trading on Friday.

Meanwhile, NuStar Energy LP’s $350 million of 7.625% series B fixed-to-floating rate cumulative redeemable preferred units – a deal priced Tuesday – finished at $25.35, which was unchanged from the open.

The preferred units were quoted at $25.30 bid, $25.35 offered early in the day.

That issue has a temporary trading symbol, “NUSRP.”

And speaking of trading symbols, Qwest Corp.’s $575 million of 6.75% $25-par notes due 2057 officially landed on the New York Stock Exchange on Friday, trading under “CTDD.”

The notes were trading at $24.95, up a penny.

The deal came April 18, in line with price talk but upsized from $250 million.

BofA Merrill Lynch, Morgan Stanley & Co. LLC, RBC Capital Markets and Wells Fargo Securities LLC were the joint bookrunners.

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