Morning Commentary: Preferreds open mixed; Medley launches add-on; Citigroup trades up

By Stephanie N. Rotondo

Seattle, Feb. 16 – Preferred stocks were mixed in early Thursday dealings as liquidity continued to be constrained.

The Wells Fargo Hybrid and Preferred Securities index was up 8 basis points at mid-morning. The U.S. iShares Preferred Stock index was off 13 bps.

Medley LLC said it had officially launched its follow-on offering of up to $28.75 million of 7.25% $25-par notes due 2024 (NYSE: MDLQ), which a trader said was “keeping us busy.”

Away from that, however, there was not much going on, he said.

Medley announced the deal on Monday. A trader said that the add-on’s price per share was talked at $25.20.

In early trading, the notes were off 23.21 cents to $24.9879.

FBR Capital Markets & Co., Incapital LLC, BB&T Capital Markets, William Blair & Co., Compass Point Research & Trading LLC, Ladenburg Thalman & Co. Inc. and JonesTrading are the joint bookrunners.

The company initially sold $30 million of the notes on Jan. 13. The exercise of a $4.5 million greenshoe brought the total amount originally outstanding to $34.5 million.

Interest is payable on a quarterly basis. The notes become redeemable on or after Jan. 30, 2020 at par plus accrued interest.

Proceeds will be used to repay a portion of outstanding amounts under a term loan facility and for general corporate purposes.

Aside from Medley, Citigroup Inc.’s 7.875% fixed-to-floating rate trust preferred securities (NYSE: CPrN) were also somewhat active, inching up 4 cents to $26.15.

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