Morning Commentary: Gladstone Investment offering term preferreds; Freddie slips post-earnings

By Stephanie N. Rotondo

Phoenix, May 5 – Talk of a new deal from a business development company proved true Tuesday as Gladstone Investment Corp. announced an offering of series C cumulative term preferreds.

Price talk is in the 6.5% area, according to a market source.

A trader said he had yet to see any gray market for the paper in early trading but noted that the company’s previous two deals were “oversubscribed.”

“This should do well,” he opined.

Ahead of the new issue’s pricing, the 7.125% series A cumulative term preferreds (Nasdaq: GAINP) were up a nickel at $25.95. But the 6.75% series B cumulative term preferreds (Nasdaq: GAINO) were off 14 cents at $25.55.

Janney Montgomery Scott LLC is running the books on the new issue.

Meanwhile, Freddie Mac’s shares were coming in after the agency reported its first-quarter results.

Though the bottom line showed year-over-year improvement, the GSE reported that it would be making a $746 million payment to the Treasury, its smallest payment since 2009.

Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) slipped 2 cents to $4.98.

Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were meantime steady at $5.00 a share.

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