Recent deals from Stifel, Bluerock, Public Storage hit NYSE; Goldman deal does well

By Stephanie N. Rotondo

Seattle, July 21 – Recently priced preferred stock issues were getting cleaned up Thursday as several began trading on the New York Stock Exchange.

Stifel Financial Corp.’s $150 million of 6.25% series A noncumulative perpetual preferred stock was one such issue. It started trading under the ticker “SFPA.”

That deal came July 11.

The paper was trading at $26.24 at mid-morning, down from opening levels of $26.50. The preferreds closed at $26.28.

Bluerock Residential Growth REIT Inc.’s $50 million of 7.625% series C cumulative redeemable preferred stock – a deal from July 12 – was another deal to hit the NYSE.

The ticker is “BRGPC.” Those preferreds were seen at $25.84 in early trading, down from $25.89 at the open. At the bell, the preferreds were seen at $25.80.

From July 13 business, Public Storage’s $300 million of 4.95% series D cumulative preferred shares began trading under the ticker “PSAPD.” Those preferreds were continuing to hang around the $24.95 mark, a trader said.

The issue ended at $24.97. Of the new listings, it was the most actively traded.

While recent deals were listing, the new issue pipeline quieted down again after pushing out a $650 million offering of 5.3% $1,000-par series O fixed-to-floating rate noncumulative preferreds from the Goldman Sachs Group Inc. on Wednesday.

But a trader said there could be more to come.

“I hear there might be a deal on Monday,” he said.

As for the Goldman deal, a market source said the paper “has done very well.”

The last trades of the day were around 103, he said, though those were smaller in size. In larger-sized trades, the preferreds were moving in a range of 101.75 to 102, he said.

Fannie, Freddie decline

Fannie Mae and Freddie Mac preferreds were among the more active securities of the day, trending lower in line with the market.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) dipped 4 cents to $4.31. Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) closed at the same price, off 2 cents.

There was no real news out to cause the surge in trading volume, but a market source noted that activist investor Bill Ackman – “He’s the one that has made a lot of bad investments over the last year and a half, including this one,” the source said – recently made some comments about the GSEs during a Pershing Square investor call. Ackman touted the mortgage giants as positive areas of his firm’s portfolio, even as some of his other investments – such as Valeant and Herbalife – have gone negative.

But the source said Ackman’s comments were not to be entirely believed.

“Despite what Ackman says, their numbers only look good if the government continues to guarantee their debt.” If that guarantee is taken away, costs at the agencies would skyrocket.

“They would be a non-investment-grade bank,” he said. “They have no equity capital and are almost purely debt-financed.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.