Preferreds lose early gains; PennyMac enters the market; Apollo gets a temporary ticker

By Stephanie N. Rotondo

Seattle, March 2 – Preferred stocks continued to retreat on Thursday, despite earlier attempts to recover from the previous day’s losses.

“[The market] bounced around to around noon, then it kind of slid,” a market source said.

The Wells Fargo Hybrid and Preferred Securities index finished the session down 16 basis points, though it was up 2 bps at mid-morning. The U.S. iShares Preferred Stock index declined 17 bps, after being 10 bps better in earlier dealings.

The source further remarked that the preferred space has been “directionless.”

“[Everyone] is trying to wait for some sort of direction from the [Federal Reserve] and the [Trump] administration,” he said.

As for the Fed, there have been some clues as to the direction the central bank plans to take in the coming months. That has led to “changing perceptions,” the source said.

In the preferred stock primary, PennyMac Mortgage Investment Trust announced plans to sell $75 million of series A fixed-to-floating rate cumulative redeemable preferred stock.

Price talk is in the 8.125% area, a market source reported.

Morgan Stanley & Co. LLC, Keefe Bruyette & Woods Inc. and RBC Capital Markets are running the books.

Meanwhile, Apollo Global Management LLC’s $250 million of 6.375% series A preferred stock – a deal priced Tuesday and freed early Wednesday – dipped a dime to $24.80.

The paper is trading under a temporary ticker symbol, “APLMP.”

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