Morning Commentary: Preferreds edge up as Brexit vote begins; American Homes deal gets a symbol

By Stephanie N. Rotondo

Seattle, June 23 – The preferred stock market was trending upward early Thursday as the pending “Brexit” vote got underway in the United Kingdom.

“Everybody is guessing that they are staying,” a trader said. As such, the broader markets were gaining ground.

For its part, the Wells Fargo Hybrid and Preferred Securities index was up 13 basis points at mid-morning.

Assuming the U.K. votes to stay in the European Union, it could spark another round of new issuance, the trader opined.

Domestically, bank stress tests are getting ready to be released. That also could result in a steady flow of deals, as financial institutions look to take out more expensive paper and replace it with cheaper yields, the trader said.

In trading, American Homes 4 Rent’s $200 million of 6.35% series E cumulative redeemable preferreds – an issue priced early Wednesday – were seen at $25.02 at mid-morning.

A trader said the issue had been assigned a temporary ticker, “AHMRP.”

The deal came upsized from $100 million and tight to the 6.375% to 6.5% price talk.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and Raymond James & Associates Inc. ran the books.

Meanwhile, BOK Financial Corp.’s $150 million of 5.375% $25-par subordinated notes due 2056 were offered at par, according to a trader.

That deal came Monday via Morgan Stanley, BofA Merrill Lynch, BOSC Inc. and Wells Fargo.

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