Preferreds gain in early trades, sink by the bell; Valley National gets temporary symbol

By Stephanie N. Rotondo

Phoenix, June 18 – Preferred stocks were edging higher early Thursday but came in around mid-afternoon, according to a market source.

The Wells Fargo Hybrid and Preferred Securities index finished down 26 basis points. The index was up 10 bps at mid-morning.

“I’m not sure what did that,” a market source said of the market’s reversal. “I tend to think it’s the Greek situation, but I’m not 100% sure.”

The source said there were a myriad headlines floating around that weren’t necessarily giving a clear picture of what had occurred. He said that some reports indicated that Greece and its European creditors were “close to a deal,” another said there was no deal, yet another indicated that no further meetings were planned, but then came word of meeting – either planned for Friday or Monday – of the European Central Bank.

“The headlines were all over the place,” he said.

Given the fluctuating nature of the trading day, volume was “not so good,” according to the source.

Valley National Bancorp’s new $115 million of 6.25% series A fixed-to-floating rate noncumulative preferreds – a deal priced Tuesday – were seen “hovering” in a $24.87 to $24.90 area early in the day, according to one trader.

However, another source placed the issue at $24.92, down 8 cents from the previous close but up from opening levels of $24.88.

By the end of business, the paper came back up to par, unchanged day over day.

The deal – which came via Sandler O’Neill + Partners LP, Keefe Bruyette & Woods Inc. and RBC Capital Markets – freed to trade on Wednesday and was also assigned a temporary trading symbol, “VLNBP.”

However, AmTrust Financial Services Inc.’s $150 million of 7.25% $25-par junior subordinated notes due 2055 – a deal from June 11 – had yet to receive a temporary symbol, a trader said.

The trader noted that the paper – which had been gaining ground earlier in the week – was “not really moving,” pegging it in a $24.80 to $24.82 context.

That deal was led by Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods.

Oxford Lane prices

Oxford Lane Capital Corp. sold $360.61 million more of its 7.5% series 2023 term preferreds (Nasdaq: OXLCO) on Thursday, the company said in a news release.

Prior to the offering, about $73.87 million preferreds were outstanding.

The new shares were sold at $24.50, a slight premium to the day’s closing price of $24.47.

The closing level was off 83 cents, or 3.26%.

Proceeds could be used to redeem some or all of the company’s 8.5% series 2017 term preferred shares (Nasdaq: OXLCP).

Those ended down 23 cents at $25.33.

Ladenburg Thalmann & Co. Inc. and Deutsche Bank Securities Inc. were the joint bookrunning managers. BB&T Capital Markets, Maxim Group LLC and National Securities Corp. were the co-managers.

Dividends are payable monthly. The preferreds become redeemable on June 30, 2016 and must be redeemed by June 30, 2023 at par plus accrued dividends.

The company will also be required to redeem some or all of the shares if they fall below an asset coverage ratio of at least 200%.

Oxford Lane is a non-diversified, closed-end management investment company based in Greenwich, Conn.

Florida Power powers down

Florida Power & Light’s 5.875% preferred trust securities (NYSE: NEEPC) were off 12 cents to $25.27 in Thursday trading.

The declines came as Florida state regulators gave the company permission to charge its customers to finance an energy exploration and development business – specifically, for natural gas fracking.

The deal will provide up to $500 million per year that can be used toward unregulated projects.

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