Preferred stocks surge in late trading; National General sells $100 million $25-par notes

By Stephanie N. Rotondo

Phoenix, Aug. 11 – The preferred stock market was “up around 3 basis points for most of the day,” a market source reported Tuesday.

On an index basis, the market was “slowly edging its way up through the course of the afternoon,” the source said. In the final moments of trading, there was a jump that pushed the market up to its intraday high.

“There was an unusual pattern at the close,” the source said, adding that “liquidity at the end of the day was definitely jumping up.

“That probably partly explains” the pop at the bell, he said.

Earlier in the session, the preferred space was trending down in line with the broader markets, as investors reacted to news that China had devalued its currency.

The 2% drop in the yuan resulted in a higher dollar and increased fears of a currency war. The devaluation also raised concerns about Greece’s pending bailout deal.

The Wells Fargo Hybrid and Preferred Securities index ended up 15 bps.

National General Holdings Corp. priced $100 million of 7.625% $25-par subordinated notes due 2055 on Tuesday.

The deal was first announced Monday and is being done concurrently with a stock offering.

Price talk was around 7.625%.

Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods Inc. are the joint bookrunning managers. JMP Securities LLC is the co-manager.

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