Morning Commentary: Preferred stock investors gun-shy following midweek sell-off; Deutsche edges up

By Stephanie N. Rotondo

Seattle, May 18 – The preferred stock market was “in a holding pattern” in early Thursday trading, according to one Chicago-based sellside source.

“I think everybody just decided, ‘Hey, we had a one-day sell-off, let’s take a vacation,’” the source said.

The source was referring to Wednesday’s losses, which were largely attributed to concerns about the viability of Donald Trump’s presidency.

As for Thursday dealings, the Wells Fargo Hybrid and Preferred Securities index was down 5 basis points at mid-morning. The U.S. iShares Preferred Stock ETF was off 10 bps.

With the market losing ground, so were Capitala Finance Corp.’s 6% $25-par notes due 2022.

However, a trader said there weren’t many markets for the deal, which priced on May 10.

The notes were bid for at $24.95, versus bids of par to $25.05 on Wednesday.

Meanwhile, Deutsche Bank AG’s 6.55% trust preferred securities (NYSE: DXB) were the top trader at mid-morning, albeit with only about 111,000 shares trading.

The paper was managing to buck the downward trend, however, adding 15 cents to trade at $25.10.

But HSBC Holdings plc’s 8% exchangeable perpetual subordinated capital securities (NYSE: HSEB) were echoing the session’s weaker tone, slipping a nickel to $27.02.

© 2015 Prospect News.
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