Preferreds lose ground as investors await bank earnings; 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 dropped 23 basis points. The U.S. iShares Preferred Stock ETF was down 31 bps.

While the market was weaker, a market source noted that the performance of preferreds was “dramatically better than Treasuries.

“There’s pretty light volume,” the source said. However, he commented that it was “slowly picking up.”

Still, he conceded that what the space needed was a round of fresh news to shake things up. But given that banks are currently in a quiet period ahead of second-quarter earnings, that seemed unlikely.

“No bank is going to be issuing [ahead of earnings],” he added.

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 ended the day at $24.89, with over 740,000 shares being exchanged.

That made the issue the day’s most actively traded security.

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