Midday Commentary: Recent deals find 'decent support'; Goodrich Petroleum plans preferred sale

By Stephanie N. Rotondo

Phoenix, April 4 - Recent new preferred issues were receiving "decent support," a trader said Thursday.

"Almost all of these things have been hanging right around the $24.75 to $24.80 mark," he said.

For instance, NorthStar Realty Finance Corp.'s 8.5% series D cumulative redeemable preferreds - a $175 million issue that priced Wednesday but had yet to free as of midday Thursday - was seen in a $24.80 to $24.90 context.

"That 8.5% coupon should make that one popular amongst the retail crowd," the trader remarked.

Digital Realty Trust Inc.'s $225 million issue of 5.875% series G cumulative redeemable preferreds - a deal that came Tuesday - was meantime seen trading around $24.75.

In other recent deals, DDR Corp.'s $150 million of 6.25% class K cumulative redeemable preferred stock - a deal that priced March 25 - were quoted at $24.85 bid, $24.90 offered at midday.

Among $25-par "baby bonds," Fifth Street Finance Corp.'s $75 million of 6.125% notes due 2028 were pegged at $24.80 bid, $24.85 offered. Main Street Capital Corp.'s $80 million of 6.125% notes due 2023 were seen in a $24.80 to par context.

"There's not a lot of action," a trader said of the latter issue. "There's probably a manager out there buying whatever since it's such a tiny deal."

Fifth Street came March 27. Main Street priced March 26.

As for Thursday business, Goodrich Petroleum Corp. said it was planning an offering of series C cumulative preferreds.

Price talk is around 10%, a trader said.

"That's pretty nice," he said of the coupon, "if you like companies that don't make any money."

Goodrich has had "negative earnings" for some time, he noted.

The trader also said that he had not seen the deal "officially launch" as of midday. He said the paper was at $24.60 bid "before it's even brought out, which is pretty common."

And, as to the secondary market's dealings, a trader said that the space was seen "up slightly with the Treasury rally, with only a few exceptions."

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