Preferreds gain after release of Fed minutes; First Republic frees to trade; Diana on tap

By Stephanie N. Rotondo

Phoenix, May 20 – The preferred stock market got a boost on Wednesday after the Federal Reserve released the minutes from its April meeting.

The Wells Fargo Hybrid and Preferred Securities index closed 14 basis points better. The index was flat at mid-morning.

Though Fed officials largely dismissed weak economic data from the first quarter, very few thought the economy was strong enough to handle a June interest rate increase.

Some Fed officials even indicated that an increase would not be appropriate until 2016.

Janet Yellen, the Fed chairman, is slated to speak at the Greater Providence Chamber of Commerce luncheon on Friday, and market players are hoping to find further clues in her speech as to when rates might go up.

Yellen is not expected to take questions at the event.

In the day’s dealings, First Republic Bank’s new $100 million issue of 5.7% series F noncumulative perpetual preferreds – a deal priced Tuesday – was already assigned a temporary reporting symbol, according to a trader.

The symbol is “FREPP.”

The deal also freed to trade, the trader said.

He pegged the issue at $24.94 bid, $24.95 offered early in the session. The paper closed at $24.92, down a penny from the day before.

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

In the bank’s other listed preferreds, the results were again mixed.

The 7% series E noncumulative preferreds (NYSE: FRCPE) were off 2 cents at $27.48, while the 5.5% series D noncumulative preferreds (NYSE: FRCPD) rose 7 cents to $24.5232.

Elsewhere in the new issue arena, Diana Shipping Inc. said it would price at least $40 million of $25-par senior unsecured notes due 2022.

Pricing is expected Thursday via Stifel Nicolaus & Co. Inc., Deutsche Bank Securities Inc., Janney Montgomery Scott LLC, BB&T Capital Markets and Wunderlich Securities Inc.

Price talk is 8.5% to 8.75%.

Company insiders are expected to subscribe for up to $12.75 million of the notes, including Simeon Palios, chief executive officer, and any of his affiliates.

Following word of the new deal, the Athens, Greece-based shipping company’s 8.875% series B cumulative redeemable preferreds (NYSE: DSXPB) dropped 32 cents, or 1.3%, to $24.60.

© 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.