Morning Commentary: Improved economic data boosts preferred space; oil, gas names get a ‘bounce’

By Stephanie N. Rotondo

Phoenix, Dec. 11 – A round of positive economic data – a gain in retail sales, a drop in jobless claims and rising consumer confidence – helped the preferred stock market rebound on Thursday.

The market had been depressed all week, pushed lower by falling oil prices.

The Wells Fargo Hybrid and Preferred Securities index was up 18 basis points at mid-morning.

While oil prices continued to falter in early trading, oil and gas preferreds looked to be attempting a rally.

“We’re just watching some of this stuff bounce,” a trader said.

Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC), for instance, were up $1.20, or 13.9%, early in the session, trading at $9.81.

The paper had lost about 12% in the previous trading day alone.

In recent deals, TravelCenters of America LLC’s 120 million of 8% $25-par senior notes due 2029 were “moving up a hair,” a trader said.

He pegged the issue at $24.75 bid, $24.80 offered. The issue closed at $24.68 bid, $24.72 offered the day before.

The notes priced Tuesday, coming upsized and at the tight end of talk.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC and UBS Securities LLC ran the books.

The trader said he doubted any other deals would be launched for the remainder of the week.

“Maybe we’ll see one or two next week,” he speculated. “But it should be kind of quiet for the rest of the year.”

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