CIM Commercial offers preferreds; Annaly Capital positive; Highland preferreds active

By James McCandless

San Antonio, July 31 – The preferred space spent most of Wednesday improving despite shifting lower after the Federal Reserve’s midday press conference on interest rates.

In primary activity, CIM Commercial Trust Corp. said it plans to price up to $900 million of $25-par series A preferred stock units with a dividend of 5.5%.

Leading secondary trading volume, Annaly Capital Management, Inc.’s 6.75% series I fixed-to-floating rate cumulative redeemable preferreds ended positive.

Closed-end fund Highland Income Fund’s new 5.375% series A cumulative preferred shares closed the session better.

Meanwhile, in finance, Synovus Financial Corp.’s 5.875% series E fixed-rate non-cumulative perpetual preferreds declined.

Sector peer JPMorgan Chase & Co.’s 6% series EE non-cumulative preferreds were trending upward.

In communications, Qwest Corp.’s 6.5% notes due 2056 also gained.

CIM’s deal

CIM Commercial plans to price up to $900 million of $25-par series A preferred stock units with a dividend of 5.5%.

Each preferred share unit includes one warrant to purchase common stock.

The preferreds are redeemable after five years. In the two years after the redemption date, the preferreds are redeemable at $21.75. After two years to five years, they are redeemable at $22.50. After five years, they are redeemable at $25.00.

Annaly Capital up

Placing at the top of trading, real estate investment trust Annaly Capital’s 6.75% series I fixed-to-floating rate cumulative redeemable preferreds ended Wednesday positive.

The preferreds (NYSE: NLYPrI) were up 3 cents to close at $25.71 on volume of about 1.4 million shares.

On Tuesday, the preferreds picked up 3 cents.

Highland better

Elsewhere, closed-end fund Highland Income Fund’s new 5.375% series A cumulative preferred shares closed the session in a better position.

The preferreds, trading under the temporary symbol “HFROP,” added 3 cents to close at $24.85 with about 1.4 million shares trading.

On its first day of trading on Tuesday, the preferreds settled at $24.82.

Synovus down

Meanwhile, in the finance space, Synovus’ 5.875% series A fixed-rate non-cumulative perpetual preferreds were seen declining.

The preferreds (NYSE: SNVPrE) lost 8 cents to close at $25.84 on volume of about 678,000 shares.

Sector peer JPMorgan’s 6% series EE non-cumulative preferreds were trending upward.

The preferreds (NYSE: JPMPrC) garnered 7 cents to close at $27.81 with about 620,000 shares trading.

On Tuesday, the preferreds rose 34 cents.

Qwest gains

In the communications space, Qwest’s 6.5% notes due 2056 were also gaining with the rest of the market.

The notes (NYSE: CTBB) closed better by 5 cents to $24.64 on volume of about 595,000 notes.

Indexes mixed

The Wells Fargo Hybrid & Preferred Securities Financial index was up by 0.08% at the close, reversing a 0.09% dip in early Tuesday trading.

The iShares US Preferred Stock ETF held level at $37.35.

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