Preferreds start Q2 on a quiet note; UMH slips after add-on; PartnerRe exchange eyed

By Rebecca Melvin

New York, April 1 – The preferred stock market started the new quarter on a quiet note on Friday, as market players pored over economic data, including the March U.S. jobs report and manufacturing data.

“People are absorbing the numbers,” a market source said. Referring to the jobs report, he said, “the top number was better than expected, but the shocker on it was the lack of manufacturing jobs. So it is kind of a mixed signal for what the Fed might do.”

Given the idea that the economy is mixed, and with the expectation that the Federal Reserve will sit tight and not raise interest rates, it is likely that the preferred market will see an uptick in new issuance, at least at the beginning of the quarter, the market source said.

“With expectations of no rate raise, we should see stronger issuance,” the source said.

Meanwhile, in early trading action, UMH Properties Inc.’s 8% series B cumulative redeemable preferred shares were lower after the company priced a $50 million add-on of the shares at a premium for proceeds of $51 million.

Elsewhere, market players considered the merits of PartnerRe Ltd.’s exchange offer in which it is offering new series G preferred shares with longer call protection in exchange for three series of existing preferreds.

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