Fannie, Freddie lead secondary market on low-liquidity session; GasLog, Capitala improve

By Colin Hanner

Chicago, May 15 – The morning lull continued into the afternoon session in the preferred stock space on Monday, though movers were on the whole higher on the session. Government-sponsored enterprises Fannie Mae and Freddie Mac were mixed.

The Wells Fargo Hybrid and Preferred Securities index was up 10 basis points, down 3 bps from mid-morning. The U.S. iShares Preferred Stock ETF was up 5 bps, down 2 bps from mid-morning.

Leading secondary movers were Fannie and Freddie, which, after a surge last week after an announced “revamp” of government-sponsored enterprises, according to the Wall Street Journal, were leading the preferred space in volume throughout the day.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were down 5 cents, or 0.69%, to $7.15, a 6-cent downswing from the mid-morning.

More than 690,000 of the preferreds were exchanged.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were up 3 cents, or 1.16%, to $7.00, a 5-cent downward swing from the morning session.

Nearly 410,000 of those preferreds traded.

Recent deals trade higher

Capitala Finance Corp.’s $70 million of 6% $25-par notes due 2022 were quoted at $25 bid, $25.10 offered, up from a $24.95 bid, $25 offered at mid-morning.

GasLog Partners LP’s 8.625% series A fixed-to-floating rate cumulative redeemable preference units, under the temporary ticker “GSLGF,” were trading at $25.15 bid, $25.25 offered, compared to a similar bid and a $25.20 offered price at mid-morning.

The market source said the issue is expected to list on Wednesday.

With recent issues Capitala and GasLog hitting the market last week, a market source said he expects the momentum to carry over.

“There’s no news on a new deal yet, but I wouldn’t be surprised to see a couple of new deals this week,” a market source said, adding that there were whispers of HSBC Holdings plc offering a contingent convertible deal.

Elsewhere in the secondary market, Goldman Sachs Group Inc.’s series D non-cumulative floating-rate preferreds (NYSE: GSPrD) were down 24 cents, or 1.03%, to $22.95.

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