Midday Commentary: Preferred market subdued going into holiday; Fifth Third joins redemption gang

By Stephanie N. Rotondo

Phoenix, July 3 - It was a half-day for the preferred stock market on Tuesday, given that Wednesday is the Fourth of July, and the market was certainly performing as such, according to a trader.

"There's nothing going on. No news to report," he said. "It's a half-day, so nobody is going to be doing anything."

Still, the trader remarked that the next few weeks should be positive for the preferred space.

"The equity market is looking good," he said, noting that "they're doing enough in Europe" and that "quantitative easing is on the table." Given that, "we should see an equity market rally, and preferreds should move in sympathy."

But as the current week is a bit of a throwaway, the trader also said that the new issue calendar would likely not produce fruit this week.

"I wouldn't be surprised if we see more deals kicking up next week," he added, especially because so many financial institutions have been issuing calls for trust preferreds.

Speaking of redemptions, Fifth Third Bancorp said late Monday that it will redeem all $575 million of its 7.25% trust preferreds (NYSE: FTBPA) on Aug. 15.

The call price, including accrued dividends, is $25.453125. At midday on Tuesday, the preferreds were trading down a penny at $25.40.

Elsewhere, BGC Partners Inc.'s $100 million issue of 8.125% $25-par senior notes due June 15, 2042 officially listed on the New York Stock Exchange on Tuesday.

The ticker symbol is "BGCA." The deal priced June 21.

At mid-afternoon, the notes were trading at $25.39. That compared to opening levels of $25.10.

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