Preferred stocks gain ahead of Fed decision; KeyCorp stays busy, firms; Saratoga eyed

By Stephanie N. Rotondo

Seattle, Dec. 13 – The preferred stock market was gaining ground on Tuesday as investors waited to see if the Federal Reserve would in fact raise interest rates.

The Wells Fargo Hybrid and Preferred Securities index firmed 7 basis points. The index was up 21 bps at mid-morning.

The central bank began its two-day policy meeting on Tuesday, with a statement expected to come Wednesday afternoon. It is widely anticipated that the Fed will in fact raise interest rates.

While the market was performing better, overall activity was on the muted side, according to a trader.

“It’s pretty quiet,” he said. “A lot of things went ex-dividend today.”

KeyCorp’s $500 million of 6.125% series E fixed-to-floating rate noncumulative perpetual preferred stock – a deal priced Dec. 5 – rose 13 cents to $25.45.

At mid-morning, the issue was holding in a $25.33 to $25.40 range, a trader reported.

A market source said the issue would begin trading on the New York Stock Exchange under the ticker symbol “KEYPI” on Thursday.

Currently, the paper is trading under a temporary symbol, “KYYPP.”

As for this week’s new deals, a trader said Saratoga Investment Corp.’s planned $55 million offering of $25-par seven-year notes could be pricing later in the day.

However, details were not available as of press time.

The trader noted that he had not yet seen any price talk – nor any gray markets, for that matter – but that he heard “the deal is going well.”

Ladenburg Thalmann & Co. Inc., BB&T Capital Markets, Compass Point and William Blair & Co. are running the books.

Proceeds from the offering will be used to take out a portion of the 7.5% $25-par notes due 2020 (NYSE: SAQ).

The 7.5% notes traded off 2 cents to $25.18.

As for the secondary market, Dominion Resources Inc.’s 5.25% $25-par 2016 series A enhanced junior subordinated notes due 2076 (NYSE: DRUA) were trading actively, though on no news to act as a catalyst.

The paper improved a penny to $21.10, with 1.12 million of the notes trading.

© 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.