Preferreds start December firm; Eagle Point prices; Entergy slips; Breitburn Energy down

By Stephanie N. Rotondo

Seattle, Dec. 1 – The preferred stock market was moving back up on Tuesday after losing ground on Monday.

The Wells Fargo Hybrid and Preferred Securities index closed 18 basis points higher. The index ended the previous session off by 20 bps.

The primary space saw a small deal from Eagle Point Credit Co. Inc. price during the session. The Greenwich, Conn.-based investment firm sold $25 million of 7% $25-par unsecured notes due 2020.

The deal came via Incapital LLC. Initial price talk was around 6.625%.

Proceeds will be used to acquire investments and for general working capital purposes.

Meanwhile, Entergy Louisiana LLC’s 6% $25-par first mortgage bonds due 2040 (NYSE: ELB) were softening after the company said late Monday that it was redeeming $32 million of the $150 million outstanding notes.

The bonds ended down 19 cents at $25.45.

The redemption will occur Dec. 30. The redemption price is par plus accrued interest.

Overall, the preferred space was a bit muted. Chatter was that trading would be on the quieter side until Thursday, after the release of the Federal Reserve’s Beige Book on Wednesday.

Breitburn cuts distribution

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) declined Tuesday after the Los Angeles-based oil and gas company said it was suspending distributions on its common units.

However, the monthly distribution on the series A and B preferred units were declared, though the series B distribution is being paid in kind.

The series A units fell 29 cents, or 3.17%, to $8.86.

Additionally, a distressed debt trader said the 7.875% notes due 2022 closed at 29½, down from 34¾ “a week or two ago.”

In its announcement – which came late Monday – Breitburn said the decision to suspend the common units distribution was due to “the ongoing weakness in commodity prices, and crude oil prices in particular.”

By cutting the distribution, the company hopes to save $111 million annually. Those savings will be redirected to reduce debt or for investments in the company.

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