Morning Commentary: ‘Not much happening’ in preferreds after holiday; Compass, PennyMac trade

By Colin Hanner

Chicago, July 5 – The preferred market was still in a holiday lull on Wednesday morning, with liquidity low and movement mixed.

“Not much happening today,” a market source said. “I doubt we see any deals this week as most people took the week off.”

At mid-morning, the Wells Fargo Hybrid and Preferred Securities Index was down 11 basis points while the U.S. iShares Preferred Stock ETF was up 11 bps.

Compass Diversified Holdings LLC’s $100 million of 7.25% series A preferred stock (NYSE: CODIPrA), which listed on the New York Stock Exchange on Monday, was trading at $24.83, the same handle it finished with on Monday.

PennyMac Mortgage Investment Trust’s $175 million of 8% series B fixed-to-floating rate cumulative redeemable preferreds, which is trading on the gray market under the ticker “PNNMP,” was trading around $24.85, off 3 cents from Monday’s finish, a market source said.

In the secondary market, government-sponsored enterprise Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were down 1 cent, or 0.18%, to $5.89.

More than 200,000 shares had exchanged hands as of mid-morning.

Trailing with less than half of Fannie’s volume, Qwest Corp.’s 6.50% $25-par notes due 2056 (NTSE: CTBB) were up 10 cents, or 0.40%, to $25.08.

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