Preferreds up as oil sees modest rebound; energy names ‘bounce’; rebalance spurs activity

By Stephanie N. Rotondo

Phoenix, Jan. 7 – Preferred stocks were again firming up in Wednesday trading, helped in part by a rebound in oil prices.

“Energy stocks are bouncing because oil has settled down,” a trader said, also noting that the long bond was trading off a bit.

The Wells Fargo Hybrid and Preferred Securities index ended the session up 24 basis points. It was up 14 bps at mid-morning.

In the energy realm, Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) closed up 16 cents at $20.79. The units were up 47 cents, or 2.28%, early in the session, trading at $21.10.

Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) were also initially higher, putting on 16 cents, or 1.8%, to trade around $9.04.

But by the end of the day, the paper – as well as the 9.75% series D cumulative preferreds (NYSE: GDPPD) – retreated into negative territory.

The 10% preferred shares fell 45 cents, or 5.07%, to $8.43, while the 9.75% preferreds lost 54 cents, or 7.02%, to end at $7.15.

While overall liquidity was subdued, a couple of the day’s most actively traded issues were ones that will be included in an upcoming rebalance of the S&P U.S. Preferred Stock index.

The rebalance will take effect on Jan. 16.

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