Morning Commentary: Chimera preferreds improve; Physicians Realty may bring new deal; GSEs up

By Colin Hanner

Chicago, Feb. 24 – Activity was mostly quiet in the preferred market on Friday morning, a trader said, as onlookers turned to president Donald Trump’s speech at the Conservative Political Action Conference for any reference to a tax plan that could bring more issues to the space.

The Wells Fargo Hybrid and Preferred Securities index was up 12 basis points at mid-morning, and the U.S. iShares Preferred Stock index was up 21 bps.

Overall, the market was firm at mid-morning, though a trader said issues that were down most likely had a reason.

“A lot of things went ex-dividend today, so if you see issues down, it’s most likely because they paid a dividend,” the trader said.

In the primary market, Chimera Investment Corp.’s recently priced $300 million sale of 8% series B fixed-to-floating rate cumulative redeemable preferreds were trading at $24.85 bid, $24.87 offer, a slight upward bump from Thursday’s session.

A trader said that Physicians Realty Trust (NYSE: DOC), a real estate investment trust, filed a shelf filing on Friday, indicating it may bring a preferred to market soon.

In the secondary space, HSBC Holdings plc’s 8% perpetual subordinated capital preferreds (NYSE: HSEB) were up 12 cents, or 0.46%, to $26.09 after taking a 30-plus cent plunge overnight.

Vanguard Natural Resources, LLC’s 7.625% series B cumulative redeemable preferreds (NYSE: VNRBP) were down 5 cents, or 2.44%, to $2.00.

Overall government-sponsored enterprises were relatively muted during mid-morning trading.

Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 11 cents, or 1.56%, to $7.18.

Fannie’s 7.625% series R noncumulative preferreds (OTCBB: FNMAJ) were up 6 cents, or 0.86%, to $7.00.

And Freddie Mac’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were up 30 cents, or 4.51%, to $6.95.

Citing a Bloomberg Intelligence analysis, a trader said that a U.S. Court of Appeals for the D.C. Circuit ruling against plaintiffs in a Perry Capital LLC v Mnuchin case earlier in the week could be beneficial to shareholders because it would force Congress to do something “sooner rather than later,” especially considering Treasury secretary Steven Mnuchin and Trump’s previous investments in the GSEs.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.