Preferreds gyrate; Legg Mason, Entergy New Orleans trade on NYSE; Deutsche Bank mixed

By Stephanie N. Rotondo

Seattle, March 24 – The preferred stock market was initially trending lower in Thursday trading, following in line with the rest of the markets as oil prices declined and the dollar gained strength.

However, the space managed to recover ground by the bell, eventually ending with a more positive feel.

The Wells Fargo Hybrid and Preferred Securities index closed up 12 basis points. The index was off 11 bps at mid-morning.

Two recently priced deals began trading on the New York Stock Exchange on Thursday: Legg Mason Inc.’s $250 million of 6.375% $25-par junior subordinated notes due March 15, 2056 and Entergy New Orleans Inc.’s $110 million of 5.5% $25-par first mortgage bonds due April 1, 2066.

Legg Mason’s ticker is “LMHA.” Entergy’s is “ENO.” Legg Mason priced on March 7, and Entergy New Orleans came about a week later on March 15.

In early trading, the Legg Mason notes were at $25.05, down from opening levels of $25.19.

Entergy New Orleans’ notes were seen at $25.75, which compared to $25.71 at the open.

Meanwhile, Deutsche Bank AG’s paper was on the mixed side as it was reported that the German bank was looking to add 100 people to its equity trading teams.

Reuters first published the story, citing a source “familiar with the matter.” The source said the hirings are part of the bank’s new strategy to turn its investment banking unit around.

However, a market source said he didn’t think the news was the reason for the day’s movements.

“That situation is kind of volatile,” he said. “Some of these levels are kind of outrageous. So I think it’s just a readjustment.”

The 8.05% trust preferred securities (NYSE: DKT) ended 5 cents higher at $25.31. The 7.6% TruPs (NYSE: DTK) were off a penny at $24.82.

The source also commented that the 8.05% securities “should probably be up more because the yields are way out of whack.” The 7.6% preferreds, for instance, are trading at a 7.7% yield to perpetuity, he said, while the 8.05% preferreds are trading at a 7.33% yield to call in two years.

The difference between the two is “kind of crazy,” he added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.