Preferreds up amid economic data; RAIT covered by JMP; RBS to be fined for mortgage advice

By Stephanie N. Rotondo

Phoenix, Aug. 26 – Preferred stocks were again strong on Tuesday, helped by a fresh round of improving economic data.

The Wells Fargo Hybrid and Preferred Securities index was up 11 basis points.

A trader said that the latest durable goods numbers were “really good,” causing him to expect a sell-off in Treasuries. Instead, he said, the bonds had been gyrating between positive and negative territory.

As such, “it’s just quiet right now,” he said early in the session.

JMP Securities initiated coverage on RAIT Financial Trust on Tuesday.

“That’s probably why [the 7.125% $25-par senior notes due 2019] were up yesterday,” a trader said.

Come Tuesday, the notes (NYSE: RFTA) were coming in a little.

One trade quoted the issue at $24.97 bid, par offered. According to the NYSE, paper was trading at $24.95, down 8 cents from the previous close but unchanged from opening levels.

The $70 million deal priced Aug. 11 via Deutsche Bank Securities Inc., Barclays, Keefe Bruyette & Woods and Credit Suisse Securities (USA) LLC.

Meanwhile, Royal Bank of Scotland Group plc was mixed in Tuesday trading as it was reported that the Edinburgh-based bank would likely be slapped with a large fine for giving faulty advice on mortgages.

RBS’ preferreds were also quite active in an otherwise muted day.

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