Morning Commentary: CAI preferreds on tap; 1347 Property Insurance lists; preferreds down

By Abigail W. Adams

Portland, Me., March 22 – The preferreds secondary market was down in early trading on Thursday as the primary market readies a new deal.

CAI International, Inc. plans to price $25 million of $25-par perpetual series A fixed-to-floating rate cumulative redeemable preferred stock after the market close on Thursday with price talk for an initial dividend in the 8.5% area.

CAI’s offering is the second preferred stock offering of the week which also saw the pricing of a new baby bond deal.

As new paper enters the preferred space, the secondary market remains in the red, according to two market indicators.

The Wells Fargo Hybrid & Preferred Securities Financial index was down 0.08% shortly before noon ET. The U.S. iShares Preferred Stock ETF was down 0.16%.

1347 Property Insurance Holdings Inc.’s recently priced 8% series A perpetual cumulative preferred stock is now listed for trade on the Nasdaq under the ticker “PIHPP.”

However, the listing did little to improve the status of the struggling preferreds. The 8% preferreds were seen at $24.25 bid early in Thursday’s session.

1347 priced $16 million, or 640,000 shares, of 8% series A perpetual cumulative preferred stock at $25.00 per share on Feb. 23.

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