Midday Commentary: Preferreds dip in early trading; Seaspan's $25-par notes to price

By Stephanie N. Rotondo

Phoenix, March 27 - Preferred stocks were giving up ground in early Thursday trading.

The Wells Fargo Hybrid and Preferred Securities index was off 29 basis points as of mid-morning.

Seaspan Corp.'s proposed offering of $25-par notes due 2019 had yet to price after being announced in the previous session. However, a trader said he saw a $24.90 bid for the paper, no offers.

He speculated that deal would come later in the day.

Meanwhile, Digital Realty Trust Inc.'s $300 million issue of 7.375% series H cumulative redeemable preferreds were admitted to the New York Stock Exchange on Thursday, as was expected.

The deal came March 19. The ticker symbol is "DLRPH."

A trader quoted the issue at $24.83 bid, $24.85 offered. The shares were trading at $24.85.

Elsewhere in the secondary, a trader said Fannie Mae and Freddie Mac preferreds were "ticking up a little bit." He noted that Bank of America Corp. had agreed to a settlement with the two agencies late Wednesday, in which the bank would pay them $9.5 billion to settle claims related to losses on securities backed by faulty loans.

Additionally, representative Maxine Waters of California introduced a draft proposal of yet another bill aimed at reforming the mortgage giants. As outlined, her bill would create a co-op of lenders that could issue home loans backed by the government. The bill would also create an insurance fund that could be drawn upon in case of another financial crisis.

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