Funds flowing out of Pimco on founder’s departure; Qwest preferreds dip; Pebblebrook lower

By Christine Van Dusen

Atlanta, Sept. 30 – The preferred stock market was quiet on Tuesday as investors prepared for the fourth quarter and money continued to flow out of Pimco funds in the wake of founder Bill Gross’ move to Janus Capital Group.

Since Gross surprised the market on Friday with this announcement, more than $10 billion has left Pimco, which manages about $2 trillion in assets.

“We’re still seeing outflows,” a trader said, and “also seeing a sell-off in Freddie Mac and Fannie Mae preferreds, though that could just be profit-taking for the quarter end.”

In other news, Qwest Corp.’s new $500 million issue of 6 7/8% $25-par senior notes due 2054 traded Tuesday morning at $24.35, dipping from Monday’s $24.40 and matching Friday’s low, a trader said.

The Monroe, La.-based telecommunications company has two 7% issues coming due in 2052, one in April and one in July. Both were recently spotted trading above par.

Pebblebrook Hotel Trust’s 6.5% series C cumulative redeemable preferred shares traded early on Tuesday at $24.30, unchanged, following additional issuance last week.

By the close on Tuesday the notes had moved down to $23.75.

The company issued 1 million shares at a liquidation preference of $25.00 per share, according to a 424B5 filing with the Securities and Exchange Commission.

Wells Fargo Securities LLC is the underwriter for the SEC-registered deal.

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