Morning Commentary: Preferreds gain in early trading; Scorpio Bulkers prices; Morgan Stanley steady

By Stephanie N. Rotondo

Phoenix, Sept. 15 – After spending the bulk of the previous week under pressure, the preferred stock market started Monday’s session strongly.

The Wells Fargo Hybrid and Preferred Securities index was up 11 basis points at mid-morning.

However, a trader remarked that early trading was subdued, speculating that an upcoming vote on Scotland’s independence might be the culprit.

“I think people are waiting on the Scottish vote to see how it will affect the market,” he said.

The vote takes place Thursday.

Scorpio Bulkers Inc. priced $65 million of 7.5% $25-par senior notes due 2019 on Monday. The Monaco-based shipping company had originally registered the deal on Aug. 11. At that time, only $35 million of the notes were expected to sell.

On Thursday, the company upsized the offering to $60 million. The size was then lifted again upon pricing.

Price talk was 7.5% to 7.625%.

Stifel Nicolaus & Co. Inc., Deutsche Bank Securities Inc. and Jefferies LLC ran the books.

Among recently priced deals, Morgan Stanley & Co. Inc.’s $1 billion of 6.375% series I fixed-to-floating rate noncumulative preferreds were holding north of par, according to a trader.

The trader quoted the issue at par bid, $25.05 offered.

The deal came via Morgan Stanley & Co. LLC on Thursday.

The issue begins to float on Oct. 15, 2024 at Libor plus 370.8 basis points.

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