Customers Bancorp wanes; BofA set to list on NYSE; primary quiet ahead of Fed meeting

By Stephanie N. Rotondo

Seattle, April 25 – The preferred stock market had a negative tone as the week kicked off on Monday.

The Wells Fargo Hybrid and Preferred Securities index closed of 10 basis points. The index was down 4 bps at mid-morning.

Deals priced last week continued to be in focus. A trader saw Customers Bancorp Inc.’s $50 million of 6.45% series E fixed-to-floating rate noncumulative preferreds at par bid, $25.05 offered.

The issue closed at $25.06 on Friday.

The issue priced Thursday.

Bank of America Corp.’s $900 million of 6% series EE noncumulative preferreds – a deal priced April 18 – were meantime pegged at $25.15 bid, $25.20 offered.

A market source said the issue is expected to hit the New York Stock Exchange on Tuesday. The ticker symbol will be “BACPA.”

As for the current week’s new issue pipeline, a trader said he was hearing that “maybe there will be some deals later in the week.” He also noted that the first part of next week should bring a few new issues.

The market could be holding off on pushing out any deals until after midweek, as the Federal Reserve is scheduled to meet Tuesday and Wednesday to discuss its monetary policy. It is widely believed that the central bank will hold interest rates steady and that the focus will be inflation.

Oil names mixed

Profit-taking and worries about production increases were weighing on domestic crude oil prices on Monday.

That, in turn, was keeping oil and gas-linked preferreds on the radar. However, the sector ended mixed for the day.

Legacy Reserves LP’s preferreds were gaining ground, with its 8% series A fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYP) rising 35 cents, or 6.12%, to $6.07. The 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) improved 21 cents, or 3.68%, to $5.92.

Both saw above-average trading for the day.

Vanguard Natural Resources LLC and Breitburn Energy Partners LP, however, were weaker on the day.

Vanguard’s 7.875% series A cumulative redeemable preferred units (Nasdaq: VNRAP) declined 39 cents, or 8.32%, to $4.30. Breitburn’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) fell 20 cents, or 8.16%, to $2.25.

Last week, oil prices popped 5% after a three-day oil worker strike in Kuwait helped to raise hopes that a supply glut was coming to an end. But those hopes appeared to be dashed come Monday, as Saudi Arabia said it was nearing completion of a major oilfield and Genscape reported a 1.5 million-barrel build at the Cushing, Okla., delivery point last week.

Fannie, Freddie active

Fannie Mae and Freddie Mac were trading actively Monday, considering that overall activity was subdued.

“If you look at the volume, it is not very high, it’s just that everything else is even lower,” a market source said.

Furthermore, “their price moves are not that dramatic,” he said. “So I ascribe that all to someone speculating somewhere.”

The GSEs’ preferreds were trading mixed during the first trading session of the week.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 12 cents, or 3.26%, to $3.80. Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ), however, dipped a penny to $3.70.

© 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.