Energy Transfer’s new preferreds lead market down; Hercules’ new $25-par notes lower

By James McCandless

San Antonio, April 24 – Traders reported a muted day in the preferred market as it followed the broader equities markets downward.

Energy Transfer Partners, LP’s new preferreds led the market in volume as the units traded down.

Hercules Capital, Inc., another name with a new issue, saw similar volume as the units declined.

Barclays plc’s preferreds were off after the company’s CEO came out of a regulator probe with just a fine.

Energy Transfer down

Energy Transfer’s newly priced $450 million of series C fixed-to-floating rate cumulative redeemable perpetual preferred units led the market in volume with about 1,228,000 shares trading hands on Tuesday.

The new units come with a 7.375% dividend.

The deal was priced after the market close last Wednesday.

“It outpaced everything else, which is unusual for the overall level of activity we had today,” a trader said.

The preferreds fell 10 cents to close at $24.70.

Hercules off

Hercules Capital’s recent pricing of $75 million of $25-par notes due 2025 was not far behind Tuesday’s volume leader with about 863,000 shares exchanged.

The new deal was priced after market close on Monday.

The 5.25% notes were off 10 cents to close at $25.55.

Barclays dips as probe ends

Barclays’ 8.125% series 5 non-cumulative callable dollar preference shares were down with the rest of the market after the company announced on Tuesday that CEO Jes Staley would remain at his post after British regulators issued a fine of no more than $2 million for his efforts to uncover the identity of a whistleblower.

The company is also receiving pressure from an activist investor to open up a seat on its board and to find ways to increase profits in its investment bank division.

With about 234,000 shares trading, the preferreds were down 6 cents to close at $26.04.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index traded down 0.21%, widening from the 0.17% decline seen Tuesday morning.

The iShares US Preferred Stock ETF lost 8 cents to close at $37.17.

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