Trader: Exelon could be considering deal; new issues expected this week; market closes strong

By Stephanie N. Rotondo

Phoenix, May 27 - The preferred stock market posted gains after the long Memorial Day weekend.

The Wells Fargo Hybrid and Preferred Securities index was up 6 basis points as of mid-morning and up 13 bps at the close.

"Volume was on the lighter side," a source said. "Some people are [at work but still mentally] at the beach."

No new issues were announced during the session, and one market source said he wasn't even hearing rumors of planned deals.

"But I would expect there would be some this week," especially given where spreads are, he said.

Meanwhile, a trader opined that Exelon Corp. could be looking to bring a preferred stock deal given that the company filed a universal shelf registration on Friday.

The filing, the trader said, indicated that the company wants to raise money or sell securities to redeem or replace existing debt.

The trader noted that Chicago-based power producer Exelon has some "$1,000-par Baltimore Gas [& Electric Co.] issues outstanding."

Of the day's dealings, JPMorgan Chase & Co.'s 6.7% series T noncumulative preferreds (NYSE: JPMPB) saw the most action, with almost 950,000 shares trading. The issue ended the day up a penny at $25.85.

Morgan Stanley's 6.625% series G noncumulative preferreds (NYSE: MSPG) were also somewhat busy and better, rising a penny as well to $25.31.

Among other actively traded issues, Citigroup Inc.'s 6.875% series K fixed-to-floating-rate noncumulative preferreds (NYSE: CPK) put on a dime to close at $26.75, while Goldman Sachs Group Inc.'s 5.95% series I noncumulative preferreds (NYSE: GSPI) earned 3 cents to finish at $23.56.

NorthStar Realty Finance Corp.'s 8.75% series E cumulative redeemable preferreds (NYSE: NRFPE) were included in the day's more actively traded list, but the shares bucked the overall positive trend of the day, closing down 5 cents at $25.02.

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