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Published on 2/22/2018 in the Prospect News Preferred Stock Daily.

Preferreds improve; Annaly Capital, AGNC Investment weaken; RAIT Financial rebounds

By Abigail W. Adams

Portland, Me., Feb. 22 – Preferreds saw their third straight day of gains on Thursday after a tumultuous few weeks of mostly losses.

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.14% and the U.S. iShares Preferred Stock ETF was up 0.19% at the market close on Thursday.

While the broader market was up, Annaly Capital Management Inc.’s recently priced 6.95% series F cumulative redeemable preferred stock was down in heavy volume trading on Thursday.

AGNC Investment Corp.’s depositary shares representing the company’s 7% series C fixed-to-floating rate redeemable preferred stock was also down in heavy volume trading.

AGNC’s depositary shares were seen as an attractive alternative for portfolios that held Annaly’s series E preferred stock, which was recently redeemed, according to a market source.

RAIT Financial Trust’s series A to C cumulative redeemable preferred shares rebounded on Thursday and were among the day’s largest gainers after tanking on Wednesday.

The preferreds nosedived on Wednesday as investors responded to the conclusion of a review of strategic and financial alternatives for the Philadelphia-based real estate investment trust.

Annaly and AGNC

Annaly Capital Management’s 6.95% preferred stock, which priced in early January, was down in heavy volume trading on Thursday. The preferreds were down 7 cents, or 0.28%, to $25.13 at the market close.

They saw more than double their average trading volume during Thursday’s session.

Proceeds from the series F preferred stock offering were used to redeem the New York-based real estate investment trust’s 7.625% series E preferred stock, which stopped trading on Feb. 8.

With a 7% yield and several years until a call date, AGNC’s depositary shares were seen as an attractive alternative for portfolios that held Annaly’s series E preferred stock.

AGNC’s depositary shares were also down in heavy volume on Thursday.

The depositary shares were down 22 cents, or 0.87%, to $25.18 at the market close Thursday.

RAIT rebounds

After ending Wednesday as one of the largest losers in the preferreds space, RAIT Financial’s series A to C preferreds ended Thursday as one of the largest gainers.

RAIT’s 7.75% series A preferred shares closed Thursday at $9.00, an increase of $1.22, or 15.68%. The series A preferred shares were down to $7.78, a decrease of $7.89, or 50.35% at the market close Wednesday.

RAIT’s 8.375% series B cumulative redeemable preferreds closed Thursday at $9.07, an increase of $1.27, or 16.28%. The preferreds closed Wednesday at $7.80, a decrease of $8.04, or 49.02%.

RAIT’s 8.875% series C preferred shares closed Thursday at $9.00, an increase of 95 cents, or 11.87%. The preferreds closed Wednesday at $8.05, a decrease of $10.00, or 55.56%.

RAIT’s preferreds tanked on Wednesday after the company announced the conclusion of a review of strategic and financial alternatives for the trust.

The review considered the potential sale of all or a part of the trust, but the board of directors concluded a sale was not in the best interest.


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