Midday Commentary: Secondary takes focus amid 'final washout'; Safe Bulkers, AmTrust plan deals

By Stephanie N. Rotondo

Phoenix, June 3 - Two new issues were hitting the preferred stock market tape on Monday, but a volatile secondary market was taking precedence, according to a trader.

"The secondary was getting crushed for the last couple of days," the trader said, pointing to a sell-off in Treasuries as the initial cause. He speculated that there was also some "fund rebalancing" at the end of the month.

With the recent volatility, as well as expected economic data coming this week, "people are more concerned with what's going on in the secondary.

"It's the final washout from last week," he said.

As to the day's new deals, Safe Bulkers Inc. said it was planning a sale of series B cumulative redeemable preferreds. The company is conducting both a private and a public offering of the securities.

Price talk is around 8%, a trader said, though he had not seen any markets for the Incapital LLC-led deal.

"Usually these things are done in a best-efforts kind of way," he said.

AmTrust Financial Services Inc. also said it would price a deal, at least $100 million of series A noncumulative perpetual preferreds.

Price talk was around 6.75%, and the size was expected to grow, the trader said.

Both new issues are expected to be nonrated.

In new listings, National Retail Properties Inc.'s $250 million of 5.7% series E cumulative perpetual preferreds were admitted to the New York Stock Exchange under the ticker symbol "NNNPE."

The deal priced May 22. The issue was trading at $24.51 at midday, versus opening levels of $24.75.

Also listed were Callon Petroleum Corp.'s $78.95 million of 10% series A cumulative perpetual preferreds.

The symbol is "CPEPA." That deal also came May 22.

The paper was trading at $47.00 at midday, down 13 cents from the previous close.

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