Preferreds contract in wake of Fed announcement; Deutsche Bank, Magnum, Goodrich decline

By Stephanie N. Rotondo

Seattle, Oct. 29 – The preferred stock market was contracting Thursday, just one day after the Federal Reserve indicated a December interest rate increase might occur, a trader said.

The Wells Fargo Hybrid and Preferred Securities index was off 9 basis points at mid-morning.

Of the day’s dealings, Deutsche Bank AG preferreds were under pressure as the German bank announced that it would cut over 30,000 jobs in the next two years and would also exit operations in 10 countries.

That news came along with the company’s earnings release, which showed a slightly narrower-than-expected loss of €6 billion.

A trader said the bank’s preferreds came in but noted that most of the issues were trading at a premium.

“I’m not seeing any fear trading yet,” he said.

The 7.6% trust preferred securities (NYSE: DTK) traded down 39 cents, or 1.43%, to $26.97. The 8.05% TruPs (NYSE: DKT) were off 60 cents, or 2.12%, at $27.74.

Domestic crude oil prices stemmed a recent rally on Thursday as investors worried about a potential interest rate increase come December.

Magnum Hunter Resources Corp.’s 8% series D cumulative preferreds (NYSE: MHRPD weakened 22 cents, or 14.67%, to $1.28. The 10.25% series C cumulative perpetual preferreds (NYSE: MHRPC) declined 37 cents, or 13.81%, to $2.31.

Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) meantime fell 11 cents, or 4.78%, to $2.19.

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