Morning Commentary: Preferred primary active; Progressive on tap; QTS frees to trade

By Abigail W. Adams

Portland, Me., March 9 – The primary market in the preferred space was active with two new deals pricing after the market close Thursday and a new deal launching prior to the market open Friday.

QTS Realty Trust, Inc. priced $100 million of 7.125% series A cumulative redeemable perpetual preferred stock after the market close on Thursday.

The preferred stock freed to trade for OTC market business under the ticker “QTTRP.”

QTS’ preferreds opened for trade at $24.57. Prior to pricing, the preferred stock offering was trading down in the gray market, a market source said, an indication it would not do well.

Bank of America Corp. priced $2.35 billion of perpetual fixed-to-floating rate non-cumulative preferred stock, series FF, after the market close on Thursday with a dividend of 5.875%, according to an FWP filing with the Securities and Exchange Commission.

The preferred stock will be sold as $1,000-par depositary shares representing a 1/25th interest.

Progressive Corp. launched an offering of $1,000-par perpetual series B fixed-to-floating rate cumulative preferred shares prior to the market open on Friday, according to a FWP filing with the Securities and Exchange Commission.

Progressive’s preferred shares will not be listed on any securities exchange.

As the primary market saw an uptick in activity, trading in the secondary space was mixed.

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.12% shortly before 12 p.m. ET. The U.S. iShares Preferred Stock ETF was up 0.07%.

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