Morning Commentary: Preferreds improve amid thin liquidity; Vanguard Natural Resources better

By Christine Van Dusen

Atlanta, Dec. 24 – The preferred stock market improved on Thursday, with names like Breitburn Energy Partners LP and Vanguard Natural Resources LLC moving higher amid thin trading on Christmas Eve.

Breitburn’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were up 48 cents at $5.60 at the open. Legacy Reserves LP’s 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) were up 58 cents at $6.24.

Vanguard Natural Resources' 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) opened at $9.61, up 52 cents.

Those gains came following an improvement in domestic crude, which stemmed from an American Petroleum Institute report that showed inventories declined by a greater-than-forecast 3.6 million barrels last week.

In other trading, New York-based Medley Capital Corp.’s new $70 million 6.5% $25-par notes due Jan. 30, 2021 that listed on the New York Stock Exchange as “MCX” on Wednesday opened down 9 cents on Thursday, at $24.55.

The deal priced Dec. 15 at a discounted price of $24.7325, indicating a 6.75% yield, with Keefe Bruyette & Woods Inc., Deutsche Bank Securities Inc., Sandler O’Neill & Partners LP and Janney Montgomery Scott LLC are the joint bookrunners.

Proceeds will be used to redeem $40 million of unsecured notes due March 30, 2019, to repay a portion of debt under a revolving credit facility, to fund new investment opportunities and for general corporate purposes.

And CHS Inc.’s 6.75% series 3 class B reset rate cumulative redeemable preferreds (Nasdaq: CHSCM) opened Thursday at $26.67, down 11 cents, while the 7.1% series 2 class B reset rate cumulative redeemable preferreds (Nasdaq: CHSCN) began the day at $27.19, flat to Wednesday.

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