Preferreds quiet as Pope speaks; Yellen eyed; deal chatter circulates; recent deals active

By Stephanie N. Rotondo

Phoenix, Sept. 24 – A preferred stock trader said the big news in early Thursday trading was Pope Francis’ address to Congress.

“There’s just nothing going on,” he said.

While the Pope’s speech likely has little impact on any market movement, a speech from Federal Reserve chairman Janet Yellen later in the day might.

Yellen was slated to give a speech on inflation at the University of Massachusetts at 5 p.m. ET. She was not expected to take any questions, but there is hope she might give a clue as to when – or if – the central bank will raise interest rates, having failed to do so last week.

Still, the preferred space initially followed the broader markets lower, with the Wells Fargo Hybrid and Preferred Securities index trading off 6 basis points at mid-morning. However, the market came back to end “basically flat,” a market source said.

“It opened down and then slowly recovered,” he said.

“I heard there might be a deal,” a trader said, though he added that he had yet to see any details. One rumor was that the new issue was coming from General Electric, he said, while another speculated that it would be from a bank.

Recent deals busy

A market source noted that volume continued to be “really, really light,” though deals priced earlier in the month remained on the active side.

Wells Fargo & Co.’s $900 million of 6% series V class A noncumulative preferreds (NYSE: WFCPV) once again topped the day’s most active list, rising 4 cents to $25.18.

A source noted that the closing price was at the high end of the trading range.

Meanwhile, Qwest Corp.’s $400 million of 6.625% $25-par notes due 2055 slipped a penny to $24.87.

Wells Fargo priced Sept. 8, and Qwest came Sept. 10.

Oil shares decline

Domestic crude oil prices wavered in Thursday trading, eventually ending with a firmer tone. However, oil and gas-linked preferreds finished weaker.

Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) fell 6 cents, or 4.65%, to $1.23. The 9.75% series D cumulative preferreds (NYSE: GDPPD) declined 22 cents, or 16.42%, to $1.12.

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) meantime lost 48 cents, or 4.14%, ending at $11.12.

And, Magnum Hunter Resources Corp.’s 8% series D cumulative preferreds (NYSE: MHRPD) declined 31 cents, or 2.62%, to $11.50.

Oil prices rose 1.37% on Thursday as Genscape Inc. reported that at least 500,000 barrels of oil were drawn from the Cushing, Okla., delivery point last week. That news followed the Energy Information Administration’s report out Wednesday, which showed stockpiles falling more than expected as domestic producers cut output.

Still, output remained high, due in part to more efficient procurement techniques.

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