Morning Commentary: Health care bill vote in crosshairs; GSEs mixed; Global Indemnity trades flat

By Colin Hanner

Chicago, March 24 – Eyes in the preferred space turned to the health care bill under consideration in Washington on Friday morning, a trader said, the result of which could have broader implications for other legislation slated for the next year.

The Wells Fargo Hybrid and Preferred Securities index was up 6 basis points at mid-morning, while the U.S. iShares Preferred Stock ETF was up 46 bps.

“Everyone has their eye on this health care reform bill, whether it gets passed or not,” a trader said. “It looks like [a vote] won’t happen until tonight, but it could be positive.”

In an article published by Reuters on Friday morning, Treasury secretary Steven Mnuchin said he expected the health care bill to pass Friday and is still aiming for tax reform by Congress’ August recess.

In the preferred space, government-sponsored enterprises were the most actively traded preferreds on the morning, and volume ticked higher than that of the past few morning sessions.

In the secondary market, Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were down 13 cents, or 1.93%, to $6.62.

And Freddie Mac’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were up 4 cents, or 0.63%, to $6.34.

In the new deal space, a trader quoted Global Indemnity Ltd.’s $120 million of 7.875% $25-par subordinated notes due 2047 at $24.85 with “no reports of a symbol” coming soon.

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