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Morning Commentary: Gladstone Investment offering term preferreds; Deutsche Bank remains weak
By Stephanie N. Rotondo
Seattle, Sept. 19 – The preferred stock new issue pipeline again started to flow on Monday, with Gladstone Investment Corp.’s proposed $35 million offering of series D cumulative term preferreds.
Price talk is in the 6.375% area, a market source said of the Janney Montgomery Scott LLC-led deal.
The McLean, Va.-based real estate investment trust plans to use proceeds to redeem its outstanding 7.125% series A cumulative term preferreds (Nasdaq: GAINP). On that news, the series A preferreds were trading off 38 cents, or 1.47%, to $25.45 at mid-morning.
Away from new issues, the preferred stock market was finding a footing in early Monday trading, after trading mostly weaker the previous week.
The Wells Fargo Hybrid and Preferred Securities index was up 40 basis points at mid-morning.
For the week, the markets are keeping an eye on the Federal Reserve, which is slated to make its latest monetary policy announcement on Wednesday. It is expected that the central bank will hold interest rates steady for now, though a rate hike could still come in December.
While the secondary was trending more positive in early trades, Deutsche Bank AG’s paper continued to trade largely softer.
The 7.6% trust preferred securities (NYSE: DTK) were down 3 cents at $25.37, while the 8.05% TruPS (NYSE: DKT) were a penny lower at $26.20.
However, the 6.55% TruPS (NYSE: DXB) were up 9 cents at $24.84.
The German bank’s preferreds started to drop on Friday after it was announced that the company had rebuffed a $14 billion settlement proposal from the U.S. Justice Department. The settlement was in relation to the bank’s role in the subprime mortgage crisis that roiled the global economy.
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