Preferred stocks dampened by concerns over Argentina, Russia; Northern Trust declines

By Stephanie N. Rotondo

Phoenix, July 31 – Preferred stocks were coming in Thursday as investors grew more concerned about a debt default by Argentina and ongoing tensions in Russia and Ukraine.

For its part, Argentina’s government was in talks with creditors to avoid a default on its obligations. The nation had until the end of Wednesday to get a deal done, or else it would be considered in default – which could increase borrowing costs for a country that is already doing poorly economically.

Certain hedge fund investors were said to be balking, however, and no deal came. Still, Argentinean officials have stated that the country will continue to pay its bondholders and that it does not consider itself to be in default.

The Wells Fargo Hybrid and Preferred Securities index ended the session down 58 basis points. The index was down 27 bps at mid-morning.

In the straight equity market, the Dow Jones industrial average dropped more than 300 points, erasing all the gains incurred so far this year.

A trader said that Northern Trust Corp.’s $400 million issue of 5.85% series C noncumulative perpetual preferreds – a deal that priced Tuesday and freed to trade on Wednesday – had been assigned a temporary trading symbol.

The symbol is “NTRNP.”

But while the paper had initially done pretty well, given that investors have been starved for new issue supply, the goings-on of the broader market weighed the preferreds down too.

The issue ended the day at $24.62, on 1.38 million shares trading.

One trader said he saw the preferreds trading around $24.80 early in the session.

Another source placed the issue at $24.78, down from opening levels of $24.84. Nearly 500,000 shares had been exchanged as of mid-morning.

Just after lunch the preferreds hit par, but then started working their way backward.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC led the deal, which came upsized from $150 million.

Initial price talk was 6%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.