Preferred stocks improve; Prospect Capital pressured; oil and gas mixed as oil slips

By Stephanie N. Rotondo

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

The Wells Fargo Hybrid and Preferred Securities index ended up 30 basis points.

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.

In the oil and gas space, Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) continued to gain ground despite another decline in oil prices. The units have been trending upward since Friday, when the company announced that it was reducing its common units distribution but was maintaining its preferred units distribution.

The units closed up 21 cents, or 2.51%, at $8.59.

As for Vanguard’s midstream sector peers, Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) remained weak.

Those units finished off 22 cents, or 4.53%, at $4.64.

Resource Capital wanes

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, however, the company’s issues were trading off.

The 8.25% series B cumulative redeemable preferreds (NYSE: RSOPB) declined 46 cents, or 2.63%, to $17.05. The 8.625% series C fixed-to-floating rate cumulative redeemable preferreds (NYSE: RSOPC) dropped 12 cents to $17.98.

The dividends will be payable on Feb. 1. Holders of the series A preferreds will receive 53.125 cents per share, while the series B holders will get 51.5625 cents per share. The series C preferreds will receive 53.9063 cents per share.

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