Preferred trading fizzles ahead of holiday; Fifth Third calls trust preferreds; Barclays mixed

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."

Despite the lack of volume, it was a "mostly green day," according to a market source.

While the holiday week was not expected to elicit much volatility, 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."

"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 on Aug. 15.

In other banking institutions, Barclays plc preferreds were mixed on the day following a "double-header" resignation of the company's chief executive and operating officers. The resignations came in the wake of a rate-rigging scandal.

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.

Fifth Third calls TrUPs

Cincinnati-based bank Fifth Third announced late Monday that it will redeem all $575 million of its 7.25% trust preferreds issued by Fifth Third Capital Trust V.

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

By the close, however, the securities had regained the penny, ending unchanged at $25.41.

The redemption will be funded with available cash, the company said in a press release. It will occur Aug. 15.

In other called issues, Citigroup Inc.'s 8.5% fixed-to-floating trust preferreds (NYSE: CPJ) inched up a cent to $25.09.

Barclays mixed on exits

Barclays' preferreds were mixed Tuesday following news that CEO Robert Diamond and COO Jerry del Missier had resigned their posts.

The bank's chairman, Marcus Agius, had announced his resignation on Monday. The exits came as investigators have probed the U.K. regarding a Libor rigging scandal.

The 6.625% series 2 noncumulative callable dollar preference shares (NYSE: BCSP) lost 20 cents, closing at $24.14. The 7.1% series 3 noncumulative callable dollar preference shares (NYSE: BCSPA) were also weaker, dropping 13 cents to $24.83.

The 7.75% series 4 noncumulative callable dollar preference shares (NYSE: BCSPC), however, were unchanged at $25.24, and the 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) were up a penny at $25.61.

Last week, Barclays agreed to pay $453 million in order to settle the U.K. and U.S. investigations into the interest rate rigging. No one has been charged with an actual crime.

BGC lists on NYSE

BGC Partners' $100 million issue of 8.125% $25-par notes due 2042 listed on the NYSE Tuesday. The ticker symbol is "BGCA."

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

At the close, the paper was trading at $25.40.

The New York-based brokerage company primarily servicing the wholesale financial and property markets priced the issue June 21. On June 28, the company said its $15 million over-allotment option was partially exercised, bringing the total issuance to $112.5 million.

Proceeds from the sale will be used to repay short-term borrowings under an unsecured revolving credit facility and for general corporate purposes.

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