Morning Commentary: Preferreds modestly higher as trading starts; Just Energy fizzles post-pricing

By Stephanie N. Rotondo

Seattle, Jan. 31 – Preferred stocks were firm as the end-of-month session began on Tuesday, though a trader said he expected it to be “a quiet day” overall.

The Wells Fargo Hybrid and Preferred Securities index was up 5 basis points at mid-morning.

Late Monday, Just Energy Group Inc. priced $100 million of 8.5% series A fixed-to-floating rate cumulative redeemable preferreds.

Come Tuesday, the new issue was seen at $24.58 bid, $24.70 offered in early dealings.

“It’s not the best thing right now,” a trader said.

The issue is the first dollar-denominated preferred sold by the Toronto-based energy provider.

Stifel Nicolaus & Co. Inc., FBR Capital Markets and National Bank Financial Inc. ran the books.

From last week’s business, Morgan Stanley & Co. Inc.’s $1 billion of 5.85% series K fixed-to-floating rate noncumulative preferreds were pegged at $25.15 bid, $25.20 offered.

The deal – which priced Jan. 24 – is trading under a temporary symbol, “MSDDP.”

As for already listed issues, Fannie Mae and Freddie Mac continued to head for higher ground early Tuesday, buoyed by news out Monday regarding a court ruling that was “in favor of the plaintiffs,” a trader said.

On Monday, the Court of Appeals unanimously ruled that of the 56 sample documents reviewed from the Treasury, 48 should be turned over to the plaintiffs, Fairholme Funds

The ruling piggy-backs on judge Margaret M. Sweeney’s decision last year, which called for the Treasury to turn over the documents it had previously tried to designate as privileged in one way or another.

The documents in question are related to the Treasury’s argument that the 2012 “net worth sweep” was necessary in order to protect taxpayers. Papers unsealed last year have thus far cast doubt on that defense.

© 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.