Morning Commentary: Preferred stocks positive heading into weekend; BNY Mellon trades around par

By Stephanie N. Rotondo

Phoenix, April 24 – The preferred stock market was firm in early Friday trading, but a trader noted that liquidity continued to be subdued.

“You’ve got the Women’s Syndicate going on, so a lot of people are off desk and out in New York,” he said.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning.

The Bank of New York Mellon Corp.’s new $1 billion issue of 4.95% $1,000-par series E fixed-to-floating rate noncumulative preferreds – a deal that priced Thursday – were seen “hovering right around par” early in the session.

Goldman Sachs & Co., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and BNY Mellon Capital Markets LLC ran the books.

Dividends will be fixed through June 20, 2020 and will be payable on the 20th day of June and December, After June 20, 2020, the dividend will float at Libor plus 324 basis points and will be payable on the 20th day of March, June, September and December.

Meanwhile, State Street Corp. reported earnings that beat expectations Friday morning. A trader noted that the bank said it planned to sell about $750 million of preferred stock over the course of 2015.

“That’s pretty much expected,” the trader said. “They are all going to issue preferreds to take out the common.”

State Street’s 6% series E noncumulative perpetual preferreds (NYSE: STTPE) were up at mid-morning, trading 3 cents higher at $25.78.

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