Morning Commentary: Preferreds look to recoup last week’s losses; CHS to price cumulative issue

By Stephanie N. Rotondo

Phoenix, Sept. 8 – After declining most of last week, the preferred stock market was getting off to a positive start on Monday.

The Wells Fargo Hybrid and Preferred Securities index was up 9 basis points at mid-morning.

CHS Inc. added a deal to the pipeline early in the session, announcing an offering of series 3 class B reset rate cumulative redeemable perpetual preferred stock.

At least $250 million shares are expected to price in a 6.75% to 6.875% context, according to a market source.

The source saw a gray market quote of $24.80 bid, $24.95 offered at mid-morning.

BofA Merrill Lynch and Wells Fargo Securities LLC are leading the deal.

Among recent deals, Bank of America Corp.’s $1 billion of 6.625% $25-par series W noncumulative preferreds were pegged at $24.80 bid, $24.82 offered.

The deal priced on Tuesday.

Also, Invesco Mortgage Capital Inc.’s $150 million of 7.75% series B fixed-to-floating rate cumulative redeemable preferreds – a deal that came late Thursday – were trading at $24.65 bid, $24.75 offered, a trader said.

As for the week’s calendar, a trader said he was hearing that Citigroup Inc., Morgan Stanley or Citizens Financial Group could be coming with a deal this week, “but nothing firm.”

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