Morning Commentary: Preferreds soften as hurricane damage mulled; Thursday’s deals not yet free

By Stephanie N. Rotondo

Seattle, Sept. 8 – The preferred stock market was slightly weaker as Friday’s session got underway.

The preferred space was following the broader markets lower as investors worried about the overall economic cost of hurricanes Harvey and Irma.

The Wells Fargo Hybrid and Preferred Securities index was down 3 basis points at mid-morning. The U.S. iShares Preferred Stock ETF was down 15 bps.

In early dealings, a trader said none of the deals that priced on Thursday had freed to trade yet.

Global Net Lease Inc.’s $100 million of 7.25% series A cumulative redeemable preferred stock was pegged at $24.60 bid, $24.70 offered.

BMO Capital Markets Corp. and Stifel Nicolaus & Co. Inc. ran the books on the deal, which priced ahead of Thursday’s open.

TCF Financial Corp.’s $175 million of 5.7% series C noncumulative preferreds were meantime seen at par bid, $25.05 offered.

Morgan Stanley & Co. LLC and UBS Securities LLC are the joint bookrunners.

And, Pennsylvania Real Estate Investment Trust’s $120 million of 6.875% series D cumulative redeemable perpetual preferred stock – a deal that came late Thursday – were offered at $24.60, according to a trader.

Wells Fargo Securities LLC, Citigroup Global Markets Inc., Jefferies LLC, J.P. Morgan Securities LLC and Stifel Nicolaus led the deal.

Among deals priced earlier in the week, the Carlyle Group’s $400 million of 5.875% series A perpetual preferred units were holding steady at par.

The deal came Wednesday tighter than the 6% price talk. The issue then freed to trade around midday on Thursday. Its temporary ticker symbol is “CGGGP.”

Morgan Stanley, BofA Merrill Lynch, UBS, Wells Fargo and JPMorgan led the deal.

Meanwhile, Alabama Power Co.’s $250 million of 5% class A cumulative preferred stock was off 8 cents at $25.27 at mid-morning. However, the issue did open higher at $25.49.

The deal came Tuesday prior to the market’s close. It soon freed, trading under the temporary ticker “ABBLP.”

Initial price talk was 5.125%.

BofA Merrill Lynch, JPMorgan, Morgan Stanley and Wells Fargo were the joint bookrunners.

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