Agency preferreds active; Goodrich loses momentum; Hancock’s $25-par notes below par

By Stephanie N. Rotondo

Phoenix, March 4 – Preferred stocks started out the midweek session with a slightly weaker tone, but, as it did in the previous session, preferreds reversed course to end on higher ground.

The Wells Fargo Hybrid and Preferred Securities index finished the day up 8 basis points, or 2 cents on average for $25-par issues. The index was off 2 bps at mid-morning.

Liquidity was meantime somewhat lacking, aside from a fair bit of activity in agency preferreds.

Freddie Mac’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) saw trading of more than 7.12 million shares on Wednesday. The preferreds ended 3 cents weaker at $4.36.

However, Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 2 cents to $4.54, with about 1.61 million shares being exchanged.

There was no fresh news out on the GSOs.

Goodrich Petroleum Corp. meantime saw its recent rise stemmed during the session. The paper had been trading up all week as investors reacted to the company’s earnings announcement – out Friday – and then word that the company had declared dividends on Tuesday.

The 10% series C cumulative preferreds (NYSE: GDPPC) retreated 19 cents, or 1.55%, to $12.06. The 9.75% series D cumulative preferreds (NYSE: GDPPD) declined 42 cents, or 3.51%, to $11.53.

In recent deals, a trader said Hancock Holding Co.’s $150 million of 5.95% $25-par notes due 2045 were offered at $24.87 early in the session.

“The manager, as I understand, has not stepped up to do anything with it,” the trader said of the new issue, which priced Monday and freed to trade on Tuesday. “He may not have to do anything if it was put away, which I heard it was.”

As previously reported, investors were not too pleased with where the issue priced, as initial price talk was in the 6.125% area.

Morgan Stanley & Co. LLC ran the books.

“I thought we would see another deal this week,” the trader remarked. “Maybe tomorrow.”

He further noted that with JPMorgan Chase & Co.’s recent call of its 6.7% capital securities (NYSE: JPMPC) and with preferred ETFs seeing a fair bit of inflows, those funds would have to fill up the space. But if banks don’t start bringing new deals, the funds could turn to the secondary, which could result in some tightening.

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