Morning Commentary: Preferred stocks climbing up in early trades; Prospect Capital pressured

By Stephanie N. Rotondo

Seattle, Dec. 21 – The preferred stock market was edging higher to start the shortened holiday week.

The Wells Fargo Hybrid and Preferred Securities index was up 20 basis points at mid-morning.

While the market was firming up, a trader noted that overall activity was limited.

“It’s just very quiet right now,” he said.

And, the market’s strength was not visible across the board.

A trader said Prospect Capital Corp.’s $150 million of 6.25% $25-par unsecured notes due 2024 – a deal priced Dec. 3 – had “an aggressive seller” in early trading, which pushed the paper down to $24.00.

The notes had been at $24.85 on Thursday, the trader noted.

Meanwhile, Resource Capital Corp. declared dividends on its preferred issues on Monday.

“It’s good because people were concerned that they wouldn’t because they were beaten down so much,” a trader said.

Previously, the trader had commented that the name had been pressured of late, as many investors believed the name to be in the oil and gas space – which it is not. In fact, it is a real estate investment trust.

On word of the preferred dividends, the company’s issues were trading off 12 to 15 cents.

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