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Midday Commentary: Holiday weekend takes people away from market action; Kayne nearing par
By Stephanie N. Rotondo
Phoenix, March 28 - Thursday was the last trading day of the week, given the upcoming Easter holiday, and as was expected, the preferred market was on the quiet side.
"It's just dead," a trader said.
Even the week's newly priced issues were not all that active, though the trader did see Kayne Anderson MLP's $110 million issue of 3.5% series F mandatory redeemable preferreds at $24.95.
That issue came on Tuesday.
In other recent deals, Citigroup Inc.'s 5.8% series C noncumulative preferreds listed on the New York Stock Exchange on Thursday, as did Boston Properties Inc.'s 5.25% series B cumulative redeemable preferreds.
Citi's preferreds (NYSE: CPC) were down a nickel at midday at $24.90. Boston Properties' securities (NYSE: BXPPB) were at $24.94, up from opening level of $24.91.
Citi priced the $500 million issue on March 19. Boston Properties' $200 million deal came March 18.
Elsewhere in the secondary market, Old Second Bancorp Inc.'s 7.8% cumulative trust preferreds (Nasdaq: OSBCP) were busy, though on no fresh news.
The issue was at $9.09 at midday.
A trader noted that the $10-par securities "have a lot of dividend to them," given that the company has not paid a dividend in over three years. He also said that "some guy has put a lot of money into them," recently buying up all of the company's TARP preferreds at a discount.
Investors could be speculating that the recent investment is a signal of a takeover or some other event that could be a boon for preferred holders - i.e., something that would require the company to pay off the preferreds, including all of the accrued dividends.
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