Recently priced preferred deals eyed, though liquidity thin; Fannie, Freddie remain active

By Stephanie N. Rotondo

Seattle, Aug. 25 – Preferred stock investors were turning toward recently priced deals in Thursday trading, though trading overall remained muted, a trader said.

Qwest Corp.’s 6.5% $25-par senior notes due 2056 (NYSE: CTBB) were on the busier side, ticking up a penny in early trades to $25.61. However, the issue finished the day off a penny at $25.59.

The $850 million issue priced Aug. 11. A $127.5 million greenshoe was fully exercised on Monday, bringing the total amount outstanding to $977.5 million.

Meanwhile, Legg Mason Global Asset Management’s $500 million of 5.45% $25-par junior subordinated notes due 2056 (NYSE: LMHB) were initially off a penny to $24.99. Like Qwest, it reversed direction by the close, ending a penny higher at $25.01.

That deal came Aug. 3.

In the most recent Entergy deals, Entergy Louisiana LLC’s $270 million of 4.875% $25-par collateral trust mortgage bonds due 2066 (NYSE: ELC) were pushing up, rising 3 cents to $24.85 in mid-morning trading.

The issue priced Aug. 10.

Entergy Arkansas Inc.’s $410 million of 4.875% $25-par first mortgage bonds due 2066 (NYSE: EAI) were also 3 cents better, closing at $24.91.

The bonds hit the market on Aug. 9.

Fannie, Freddie active

A couple of Fannie Mae and Freddie Mac issues continued to be more active than not on Thursday, with the busier securities looking to regain ground.

But one market source noted that “it was only the top three to four issues that were up [for the day]. The majority of the issues were either flat or down a touch.

“But basically, there is no new news,” he added.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) recouped most of its losses from Wednesday, finishing up 22 cents, or 5.54%, at $4.19. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) added only 3 cents to close at $3.99.

Recent court rulings have pressured the preferreds. Most recently, the market was reacting to a ruling that said shareholders gave up their rights when the government took the GSEs under conservatorship in 2008.

© 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.