Morning Commentary: Preferreds weak to start session; National General $25-par notes not yet freed

By Stephanie N. Rotondo

Phoenix, Aug. 12 – Rising concerns about global economic growth – particularly in China – were weighing on the preferred stock market in early Wednesday trading.

The Wells Fargo Hybrid and Preferred Securities index was off 14 basis points at mid-morning. It had closed the previous session up a similar amount.

On Tuesday, China devalued its currency by 2%, sparking concerns about a currency war. Additionally, investors worried what that might mean for oil prices, as the devaluation could dampen demand.

Despite the day’s weakness, a trader said he was hearing rumors of a new issue from BNP Paribas. He said talk was that the French bank was planning a sale of 10-year non-callable perpetual preferreds.

“It’s just a rumor so far,” he said.

As for deals that have been done, National General Holdings Corp.’s $100 million of 7.625% $25-par subordinated notes due 2055 were quoted at $24.50 bid, $24.57 offered.

The notes priced Tuesday via Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods Inc. Sources reported that the company received more orders than expected, though the deal size remained stable.

The issue had not freed to trade as of mid-morning.

Meanwhile, Global Indemnity plc’s $100 million of 7.75% $25-par notes due 2045 were pegged steady, trading in a $24.80 to $24.87 context, according to a trader.

That deal priced Aug. 5.

And, IberiaBank Corp.’s $75 million of 6.625% series B fixed-to-floating rate noncumulative perpetual preferreds – a deal from July 29 – were seen offered at $25.17.

© 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.