Morning Commentary: Preferred market weak as crude oil declines; Medley expected to price Friday

By Stephanie N. Rotondo

Seattle, Dec. 11 – The preferred stock market continued to be pressured going into Friday trading.

“Everyone is still focused on oil, and that’s putting a lot of pressure on the markets,” a trader said.

Domestic crude oil prices were down more than 2.3% at mid-morning, which in turn caused the common equity exchanges to be off by at least 1% across the board.

For its part, the Wells Fargo Hybrid and Preferred Securities index was down 6 basis points at mid-morning.

Medley Capital Corp.’s planned offering of $25-par notes due Jan. 15, 2021 had not yet priced, a trader reported, though he heard that the deal could price Friday.

He saw the notes offered at $24.60 in the gray market.

The New York-based business development company announced the offering on Thursday.

Keefe Bruyette & Woods Inc., Deutsche Bank Securities Inc., Sandler O’Neill & Partners LP and Janney Montgomery Scott LLC are running the books.

Medley intends to use the proceeds to redeem its $40 million of 7.125% $25-par notes due 2019 (NYSE: MCQ).

Those notes were up 4 cents in early trades at $25.02.

Meanwhile, Prospect Capital Corp.’s $150 million of 6.25% $25-par notes due 2024 – a deal from Dec. 3 – had yet to receive a symbol, a trader said.

Still, the paper has been moving closer to par in recent sessions. The notes were pegged at $24.95 bid early Friday.

UBS Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and RBC Capital Markets ran the books.

© 2015 Prospect News.
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