Morning Commentary: Preferred stocks soft amid growing geopolitical concerns; Fannie trades off

By Stephanie N. Rotondo

Seattle, April 11 – The preferred stock market was giving up some gains in early Tuesday trading.

The Wells Fargo Hybrid and Preferred Securities index was off 9 basis points at mid-morning. The U.S. iShares Preferred Stock ETF was down 28 bps.

Preferreds were following the broader markets lower as geopolitical concerns – specifically in regards to the Middle East and the Korean Peninsula – had investors looking to safer investments.

Fannie Mae’s 8.25% series T noncumulative preferreds (OTCBB: FNMAT) were topping the charts in early dealings. Like the overall space, the GSE-linked paper was trading off, losing a nickel at mid-morning to trade at $5.50.

Tsakos Energy Navigation Ltd.’s $115 million of 9.25% series E fixed-to-floating rate cumulative redeemable preferred stock (NYSE: TNPPrE) was also somewhat active, slipping 11 cents to $25.20.

The issue was admitted to the New York Stock Exchange on Monday.

The initial $100 million deal came March 29, upsized from $50 million and in line with the 9.25% area price talk. On April 3, it was reported that a $15 million greenshoe had been exercised, brining the total amount outstanding to $115 million.

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

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