Morning Commentary: Preferred stocks gain strength; Tsakos gets temporary ticker; Fannie falters

By Stephanie N. Rotondo

Seattle, March 30 – Preferred stocks remained firm as the end of the month neared.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning on Thursday. The U.S. iShares Preferred Stock ETF was up 9 bps.

The preferred space was following along with the broader markets, which got a bump on the latest GDP report. The report showed that GDP increased by 2.1% in the fourth quarter of 2016, better than the 2% growth expected by economists.

In early dealings, Tsakos Energy Navigation Ltd.’s new $100 million of 9.25% series E fixed-to-floating rate cumulative redeemable preferreds were seen at $24.78 bid, $24.85 offered.

A market source reported that the deal – priced late Wednesday and upsized from $50 million – was already assigned a temporary ticker, “TNPEP.”

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, UBS Securities LLC, Citigroup Global Markets Inc. and Stifel Nicolaus & Co. Inc. were the bookrunners.

Meanwhile, Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were losing ground in early trading, falling 8 cents, or 1.15%, to $6.87.

The GSE-linked preferred had gained ground in the previous session, as investors mulled news that senators Corker and Warner were once again looking to solve the problem of the GSEs, meeting with industry groups and former government officials to discuss options. Mike Crapo, head of the Senate Banking Committee, has also reportedly started to get briefings on the matter in hopes of reaching a compromise.

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