Morning Commentary: Preferreds slip in limited trading; PennyMac’s recent deal hits NYSE

By Stephanie N. Rotondo

Seattle, July 6 – The preferred stock market continued to see limited trading on Thursday and an overall weak tone was not helping matters.

The Wells Fargo Hybrid and Preferred Securities Index was down 12 basis points at mid-morning. The U.S. iShares Preferred Stock ETF was down 23 bps.

Still, for the day’s more active names, the results were a little more mixed.

PennyMac Mortgage Investment Trust’s $175 million of 8% series B fixed-to-floating rate cumulative redeemable preferred stock began trading on the New York Stock Exchange, according to a market source.

The ticker symbol is “PMTPrB.”

The preferreds were holding steady in early dealings, trading at $24.88.

The deal came June 27 at the rich end of price talk that had been set at 8% to 8.125%. The amount was increased from $75 million.

Morgan Stanley & Co. LLC, Keefe, Bruyette & Woods Inc. and RBC Capital Markets were the joint bookrunners.

Among more established issues, Wells Fargo & Co.’s 5.625% class A series Y noncumulative preferreds (NYSE: WFCPrY) were trading off 4 cents to $25.70, while Citigroup Inc.’s 7.875% fixed-to-floating rate trust preferreds (NYSE: CPrN) were unchanged at $26.03.

HSBC Holdings plc’s 8% exchangeable perpetual subordinated capital securities (NYSE: HSEB) even managed to tick up a touch, adding 2 cents to trade at $26.93.

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