Preferreds mixed as holiday limits liquidity; Gabelli Multimedia prices new issue

By Stephanie N. Rotondo

Seattle, Sept. 21 – The preferred stock market was about flat in Thursday trading, as Rosh Hashana kept activity subdued.

“It was not a busy day, volume-wise,” a market source said.

The Wells Fargo Hybrid and Preferred Securities index closed up 2 basis points, though it was up 10 bps at mid-morning. It closed down 6 bps on Wednesday.

The U.S. iShares Preferred Stock ETF was meantime down 3 bps, after closing down 5 bps the day before.

Wednesday’s weakness came on the heels of the latest policy announcement from the Federal Reserve’s Federal Open Market Committee. The results of that meeting were largely as expected, as the committee opted to hold interest rates steady.

The FOMC also said that it would start winding down its $4.5 trillion balance sheet beginning in October.

Despite the day’s limited activity, a new issue entered the marketplace.

The Gabelli Multimedia Trust Inc. said it had sold $50 million of 5.125% series E cumulative preferred stock via BofA Merrill Lynch and UBS Securities LLC.

G.research LLC is also participating in the offering.

Among the week’s other new issues, Gladstone Capital Corp.’s $45 million of 6% series 2024 term preferred stock – a deal priced late Tuesday – was seen trading at $24.75, down a nickel from the day before.

The deal came late Tuesday via Janney Montgomery Scott LLC and Ladenburg Thalmann & Co. Inc. The issue was assigned a temporary ticker on Wednesday, “GDDLP.”

Georgia Power Co.’s $270 million of 5% $25-par series 2017A junior subordinated notes due 2077 were meantime pegged at $25.08 bid, $25.13 offered.

“It should have been a bit higher, but one very large trade softened the price around midday,” a source reported.

The baby bonds priced on Monday. BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS and Wells Fargo Securities, LLC were the bookrunners.

As for other recent issues, there were two deals added to the New York Stock Exchange.

Global Medical REIT Inc.’s $77,625,000 of 7.5% series A cumulative redeemable preferred stock listed under the ticker symbol “GMREPrA.”

Paper was trading at $24.80 at the close, down a dime.

The issue was marginally higher in early dealings.

The deal came on Sept. 12 in line with the 7.5% price talk. The company initially sold $67.5 million of the preferreds. A fully exercised $10,125,000 greenshoe lifted the total amount outstanding to $77,625,000.

FBR Capital Markets & Co. and Janney Montgomery Scott were the joint bookrunners.

Urstadt Biddle Properties Inc.’s $100 million of 6.25% series H cumulative redeemable preferred stock was also admitted to the NYSE, under the ticker “UBPPrH.”

Those preferreds closed at $25.61, a gain of 11 cents.

The issue priced on Sept. 13. Price talk on the non-rated deal was 6.25% to 6.375%.

BMO Capital Markets Corp. and Wells Fargo Securities LLC were the joint bookrunners.

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