Breaks, holidays keep players away; Hanover Insurance hits NYSE; Fannie, Freddie active

By Stephanie N. Rotondo

Phoenix, April 1 - The preferred stock market was starting the new month off subdued, according to a trader.

"It's very quiet," he said. "People are still on breaks and most of the world is closed today for the day after Easter."

The trader noted that no news deals were announced on Monday and further remarked that he had not "heard of any new deals coming this week."

Another market source said that it was a "pretty light volume day" overall, though he did see the market ending slightly higher than Friday.

"It's a very quiet news day; Europe is closed," he gave as reasons for the muted trading.

In recently priced issues, DDR Corp.'s $150 million of 6.25% class K cumulative redeemable preferreds were seen at $24.80 bid, $24.85 offered.

The preferreds came March 25.

From Tuesday, Main Street Capital Corp.'s $80 million of 6.125% $24-par notes due 2023 were trading "right at par," a trader said.

And, from Wednesday business, Fifth Street Finance Corp.'s $75 million of 6.125% $25-par notes due 2028 were pegged at $24.60.

Meanwhile, the Hanover Insurance Group Inc.'s $175 million of 6.25% $25-par subordinated debentures due 2053 listed on the New York Stock Exchange on Monday.

The ticker symbol is "THGA." The notes were trading at $25.15 at midday, down from opening levels of $25.20.

The paper closed at $25.13.

Fannie, Freddie climb higher

Fannie Mae and Freddie Mac preferreds continued to dominate the market, especially as Fannie readies to release its delayed 10-Q this week.

Freddie's 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) closed up 6 cents, or 1.81%, to $3.38. Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) ended a dime higher, or up 3.08%, to $3.35.

Fannie had previously delayed putting out its report for the fourth quarter of 2012, given that it expected to turn a profit - both in the quarter and for the foreseeable future. As such, the company had to determine if the profits would trigger an accounting change in regards to its deferred tax assets.

As both Freddie and Fannie return to profitability, lawmakers are struggling to decide what to do with the government-backed mortgage providers. When the agencies were taken into conservatorship in 2008, most agreed that the firms would eventually be wound down and replaced with something else. But new profits are throwing those plans all out of whack, and it is unclear what path to housing reform the government will take.

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