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Morning Commentary: Preferreds continue trend upward; State Street, Eagle Point free to trade
By Stephanie N. Rotondo
Phoenix, May 15 – The preferred stock market continued to be firm into early Friday trading, even as the rest of the markets were softening.
“Our stuff is little changed,” a trader said.
The equity markets were dwindling after the Philadelphia Federal Reserve released its quarterly survey results, which indicated that economists see second-quarter economic growth at 2.5%.
That was down from previous estimates of 3%.
The Wells Fargo Hybrid and Preferred Securities index was up 13 basis points at mid-morning.
State Street Corp.’s new $750 million issue of 5.25% $1,000-par series F fixed-to-floating rate noncumulative preferreds were doing well, as a trader quoted the paper at 100.75 bid, 100.875 offered.
The trader noted that the deal freed to trade late Thursday, following pricing.
Dividends will be fixed and payable semiannually through Sept. 15, 2020. On that date, the preferreds begin to float at Libor plus 359.7 bps and will be payable quarterly.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunners.
Also freed up were Eagle Point Credit Co. Inc.’s 7.75% series A term preferreds due 2020, according to a trader.
That deal priced Wednesday.
A trader pegged the shares at $24.55 bid in early trades.
Among other recent issues, Costamare Inc.’s $100 million of 8.75% series D cumulative redeemable preferred stock began trading on the New York Stock Exchange on Friday.
The deal priced May 6. The ticker symbol is “CMREPD.”
The preferreds were at $24.82 at mid-morning, down from opening levels of $24.85.
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