Morning Commentary: Preferreds’ losses continue; NuStar Energy in focus

By Abigail W. Adams

Portland, Me., Feb. 9 – The preferreds market continued to see losses early in Friday’s session as broader equity markets remained volatile.

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.47% and the U.S. iShares Preferred Stock ETF was down 0.46% early in Friday’s session.

NuStar Energy LP’s 7.625% series B cumulative redeemable preferred stock was in focus early Friday after the company released its fourth-quarter earnings report and announced a restructuring on Thursday.

NuStar’s 7.625% preferred stock was down 12 cents, or 0.51%, to $23.74 in heavy volume trading. The preferred stock saw more than double its average trading volume early in Friday’s session.

NuStar Logistics, LP’s 7.625% fixed-to-floating rate subordinated notes due 2043 also saw high-volume trading early Friday. The notes were down 1 cent, or 0.04%, to $25.26 early in the session. NuStar Logistics is a wholly-owned subsidiary of NuStar energy.

NuStar announced plans to merge its general partner NuStar GP Holdings into its operations and reduce distribution for common units by about $200 million per year on Thursday.

The merger is subject to the approval of NuStar Holdings unit holders and may be canceled by either entity if the merger is not complete by Aug. 8, according to a company release.

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