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Morning Commentary: Preferreds rebound; Citigroup to price new issue; New York Mortgage steady
By Stephanie N. Rotondo
Phoenix, April 20 – After taking a serious hit in Friday trading, the preferred stock market was “roaring back,” a trader said Monday.
The Wells Fargo Hybrid and Preferred Securities index was up 20 basis points at mid-morning. The index closed down 43 bps on Friday.
With the renewed strength of the marketplace, Citigroup Inc. announced a benchmark offering of $1,000-par series P fixed-to-floating rate noncumulative preferreds.
Price talk is around 6.125%, according to a market source.
Citigroup Global Markets Inc. is the bookrunner.
A trader said he had yet to see any markets for the new deal.
The trader also speculated that any other deals that come during the week will have to get wrapped up by Thursday, given that the Women’s Syndicate Association will hold its annual cocktail reception on Thursday.
As for recently priced deals, New York Mortgage Trust Inc.’s $90 million of 7.875% series C cumulative redeemable preferreds were holding around $24.68 bid, a trader said.
The issue priced Wednesday via Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods Inc.
The Goldman Sachs Group Inc.’s $2 billion of 5.375% $1,000-par series M fixed-to-floating rate noncumulative preferreds were meantime pegged at 100.625 bid, 100.75 offered.
That issue priced Thursday after the New York-based bank reported earnings. The dividend will be fixed until May 10, 2020, during which time it will be payable on a semiannual basis. After that date, the dividend will float at Libor plus 392.2 bps and will be payable quarterly.
Goldman Sachs & Co. ran the books.
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