Bank preferreds firmer despite forex settlement; Ally wraps tender offer; Diana upsized

By Stephanie N. Rotondo

Phoenix, May 21 – The preferred stock market firmed up Thursday, but a trader noted that things were starting to quiet down ahead of the Memorial Day weekend.

The Wells Fargo Hybrid and Preferred Securities index ended 18 basis points higher for the day. The index was up 11 bps at mid-morning.

In secondary trading, bank preferreds were holding up despite news out late Wednesday regarding a foreign exchange probe.

Four banks – Citigroup Inc., JPMorgan Chase & Co., Barclays plc and Royal Bank of Scotland Group plc – pleaded guilty to manipulating forex markets. UBS pleaded guilty to a different change, while Bank of America Corp. avoided a guilty plea.

However, all six banks were levied a fine – for a total of almost $6 billion.

Investors might have been reacting positively to the news, as the banks now have another legal battle behind them.

Also in the financial realm, Ally Financial Inc. announced that it had completed a tender offer for 13 million outstanding shares of its 8.5% series A fixed-to-floating rate perpetual preferreds.

Ally is based in Detroit.

Meanwhile, Diana Shipping Inc. announced late Wednesday that it had priced $55 million of 8.5% senior unsecured notes due 2020. The issue was upsized from $40 million.

Come Thursday morning, a trader pegged the issue at $24.75.

He added that the notes had not yet freed to trade.

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