Fannie Mae, Freddie Mac preferreds on radar screens; Goodrich dips, then recovers

By Christine Van Dusen

Atlanta, Sept. 4 – Fannie Mae and Freddie Mac preferred stock remained in focus on an otherwise quiet Friday as investors considered the latest release of economic data from the United States.

The economy added 173,000 new jobs during August, the smallest bump since March, while the unemployment rate dipped to its lowest level seen in seven years.

“The jobs numbers were a little disappointing, so we've seen stocks sell off, and bonds are up a half-point,” a trader said. “But for the most part, nothing is really moving in our world. I think people were hoping to get a stronger jobs number, to get definition on whether we'll see a hike next week.”

Meanwhile, a potential settlement between shareholders and the federal government helped give Fannie Mae and Freddie Mac preferreds a boost on Friday.

The mortgage giants have had the bulk of their profits conscripted by the federal government under amended terms of a conservatorship agreement since 2013. Profit-taking led to a number of shareholder lawsuits, most of which allege the government acted illegally in taking most of the agencies’ quarterly earnings.

By Friday, Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were trading at $4.98, slightly higher than Thursday's $4.95, before closing at about $5.04.

Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferred stock (OTCBB: FMCKJ) traded Friday morning at $4.88, flat to Thursday's close. The notes ended Friday at $4.98.

In other trading, Goodrich Petroleum Corp.’s 10% series C cumulative redeemable preferreds (NYSE: GDPPC) – which earlier in the weak took a beating after the company cut its dividend payments – opened Friday at $2.0601, down from Thursday’s $2.7487. At the end of the day the notes were spotted at $2.2101.

The 9.75% series D cumulative redeemable preferreds (NYSE: GDPPD) moved to $1.79 on Friday morning from Thursday's $1.94 but regained some ground by the end of the day to close at $1.9101.

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