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Morning Commentary: Preferreds look to recoup losses; Invesco Mortgage prices upsized offering
By Stephanie N. Rotondo
Phoenix, Sept. 5 After being down all week, the preferred stock market was attempting to recover some losses in early Friday trading.
The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points at mid-morning.
The gains coincided with a rally in Treasury bonds, which was attributed to a weaker-than-expected jobs number, according to a trader.
Invesco Mortgage Capital Inc. released an FWP report on Friday in regards to its offering of series B fixed-to-floating rate cumulative redeemable preferreds. The company sold $150 million of the shares upsized from $75 million at par to yield 7.75%.
The deal priced late Thursday, according to the filing. Pricing came in line with talk.
In early trading, a trader quoted the new issue at $24.60 bid, $24.65 offered.
The deal had not yet freed, the trader said, though he expected it would by the afternoon.
Dividends will be payable on the 27th day of March, June, September and December, beginning Dec. 27. The rate will be fixed through Dec. 27, 2024, at which time it will begin to float at Libor plus 518 basis points.
Morgan Stanley & Co. LLC, BofA Merrill Lynch and UBS Securities LLC ran the books.
Among other recent deals, Bank of America Corp.s $1 billion of 6.625% series W noncumulative preferreds were seen in a $24.86 to $24.88 context.
The deal came Tuesday and freed to trade on Wednesday. The company also sold $2 billion of 6.25% $1,000-par series X fixed-to-floating rate noncumulative perpetual preferreds.
Looking to the coming week, a trader said the pipeline could fill up.
Were hearing of a couple deals for next week, he said, though he did not have specific names.
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