Morning Commentary: Preferreds gain post-Fed news; Hancock notes regain ground; energy slips

By Stephanie N. Rotondo

Phoenix, March 19 – Preferred stocks were firming up in early trading on Thursday, as investors continued to react positively to the Federal Reserve’s latest policy announcement.

The Wells Fargo Hybrid and Preferred Securities Index was up 8 basis points at mid-morning.

The central bank on Wednesday removed the word “patient” from its interest rate hike policy language but also maintained that it was in no hurry to jack up rates.

A trader said that even if the Fed does increase rates as early as June, as some are predicting, rates may “stay there for awhile.”

Still, the news has spurred investors to “rush back in to grab yield.”

That in turn helped Hancock Holding Co.’s $150 million of 5.95% $25-par notes due 2045 – a deal from March 2 – regain some ground.

A trader pegged the issue at $24.45 bid, $24.60 offered at mid-morning. He noted that the paper had closed out the midweek session at $24.10, though it had traded sub-$24 earlier in the day.

The recent Fed comments had also given oil prices a boost late Wednesday but come Thursday “oil sold off a little bit again,” a trader said.

West Texas Intermediate crude was down 3.38% at mid-morning, while Brent crude had dropped 2.42%.

“Energy stocks were down in sympathy,” the trader said.

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were off 50 cents in early trading at $20.65. Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) declined 37 cents, or 4.55%, to $7.77.

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