Morning Commentary: Preferreds tighten; Urstadt Biddle on tap; BofA’s new issue over par

By Stephanie N. Rotondo

Phoenix, Oct. 21 – It was a “slow grind a little tighter” for preferred stocks in early Tuesday trading, according to a trader.

While the trader noted that the market was “pretty quiet,” he did see some strength coming back into the marketplace.

Some of those names that really got beat up [last week] in E&P and shipping have come back,” he said.

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points at mid-morning. The broader markets were also moving upward, helped by a new report that indicated existing home sales had risen 2.4% in September, a one-year high.

The primary space saw a small deal hit the tape, a $61.25 million offering of series G cumulative redeemable perpetual preferred stock from Urstadt Biddle Properties Inc.

A trader saw a gray market quote of $24.72 bid, $24.80 offered.

Price talk is 6.625% to 6.875%, according to a market source.

BMO Capital Markets is leading the deal.

Meanwhile, Bank of America Corp.’s $1.4 billion of 6.5% $1,000-par series Z fixed-to-floating rate noncumulative preferreds were seen at 101.25 bid, 101.75 offered early in the day.

“I’m surprised it hasn’t been more active,” a trader said, remarking that that seemed to be the way of it lately. “Nobody cares about anything... except Ebola.”

The BofA Merrill Lynch-led issue priced Monday.

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