Preferreds come off day's highs, end weaker; Commonwealth REIT ousts board, shares mixed

By Stephanie N. Rotondo

Phoenix, March 25 - Preferred stocks were strong Tuesday after selling off during the first session of the week.

The Wells Fargo Hybrid and Preferred Securities index was up 12 basis points as of mid-morning. However, the index took a tumble around midday and eventually finished down 41 bps.

A trader said he was continuing to hear rumors of pending new deals, though he hadn't heard any specific names.

No deals were announced Tuesday.

In the secondary market, Commonwealth REIT's 7.25% series E cumulative redeemable preferreds (NYSE: CWHPE) were up slightly on news the company's investors had voted to oust the entire board of directors.

"The investors wanted the board off because they didn't like what they were doing," a trader said, though in a statement released Tuesday, the company said the board's removal was being done "without cause."

Early in the day, the preferreds were up 3 cents to par. The shares then gave those gains back, closing unchanged at $24.97.

But it was the company's 6.5% series D cumulative convertible preferred shares (NYSE: CWHPD) that really took focus, with more than 2.13 million shares being exchanged.

That issue ended the day up 43 cents, or 1.75%, at $24.95.

Meanwhile, floating-rate issues from Bank of America Corp. and SunTrust Banks were trading actively on Tuesday.

Bank of America's series 5 floating-rate noncumulative preferreds (NYSE: BMLPL) rose 15 cents to $20.40.

For its part, SunTrust's variable-rate series A perpetual preferreds (NYSE: STIPA) lost 3 cents, ending at $20.32.

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