Preferreds decline amid low liquidity; American Realty’s executive departures eyed

By Stephanie N. Rotondo

Phoenix, Dec. 15 – The preferred stock market closed weaker Monday after trending higher in early dealings.

The Wells Fargo Hybrid and Preferred Securities index ended down 26 basis points. The index was up 8 basis points at mid-morning and had been up as much as 12 bps earlier in the session.

A trader said liquidity was dwindling, likely as players prepare for the upcoming holidays.

“Everything’s just kind of hanging around,” he said, adding that he had yet to hear of any new issues for the week.

In deals from the previous week, TravelCenters of America LLC’s $120 million of 8% $25-par senior notes due 2029 – a deal priced Tuesday – was even quieting down, the trader said.

“It’s not trading really,” he said, seeing a $24.60 bid early in the day. However, he noted that the paper had been trading around $24.80 on Friday and opined that “it’s probably hanging around that same area.”

American Realty Capital Properties Inc.’s 6.7% series F cumulative redeemable preferreds (Nasdaq: ARCPP) were under pressure Monday as the company announced its top three executives had resigned.

The preferreds closed at $21.38, off 52 cents, or 2.37%.

Nicholas Schorsch, executive chairman and director, left his post, the New York-based real estate investment trust said in a statement on Friday. Schorsch was a co-founder of the company and formerly its chief executive officer.

Also leaving were David Kay and Lisa Beeson, CEO and chief operating officer, respectively.

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