Midday Commentary: Preferreds rise as jobless claims fall; Legacy Reserves selling preferred units

By Stephanie N. Rotondo

Phoenix, April 10 - Preferred stocks were moving higher Thursday morning as jobless claims fell to their lowest level since May 2007.

The Wells Fargo Hybrid and Preferred Securities Index was up 20 basis points as of mid-morning.

Still, a trader said that "it seems like no one is focused on the market."

He speculated that investors could be sitting on the sidelines waiting for bank earnings, which are slated to begin Friday with announcements scheduled from Wells Fargo & Co. and JPMorgan Chase & Co.

Talk continues to swirl that the new issue pipeline could get heavier after Easter and with the new jobs data "it should be a good environment to bring issues," the trader said.

On Thursday, Legacy Reserves LP announced plans to sell at least $35 million of series A fixed-to-floating rate cumulative preferred units.

Price talk is 8% to 8.25%, according to a trader.

Stifel Nicolaus & Co. Inc., Barclays Capital Inc. and MLV & Co. LLC are the joint bookrunning managers. Janney Montgomery Scott LLC and Ladenburg Thalmann & Co. Inc. are the co-managers.

But given the deal's small size, a trader said he had yet to see any gray markets for the units.

Meanwhile, RAIT Financial Trust's $60 million of 7.625% $25-par senior notes due 2024 finally freed from the syndicate early in the session.

The deal priced Monday and had been expected to free up Wednesday morning.

Upon freeing, the notes moved up a fair bit, according to a trader. He pegged the securities at $24.94 bid, $24.97 offered, which compared to previous levels around $24.75.

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