Better economic data lifts preferreds; oil, gas names get a ‘bounce’; TravelCenters gains

By Stephanie N. Rotondo

Phoenix, Dec. 11 – A round of positive economic data – a gain in retail sales, a drop in jobless claims and rising consumer confidence – helped the preferred stock market rebound on Thursday.

The market had been depressed all week, pushed lower by falling oil prices.

The Wells Fargo Hybrid and Preferred Securities index ended the day up 8 basis points. It was up 18 bps at mid-morning.

“It faded in the last half hour,” a market source said, noting that volume was “very, very light.”

While oil prices continued to falter, oil and gas preferreds looked to be attempting a rally.

“We’re just watching some of this stuff bounce,” a trader said.

Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC), for instance, were up 84 cents, or 9.76%, at $9.45. The 9.75% series D cumulative preferreds (NYSE: GDPPD) gained 42 cents, or 5.36%, to finish at $8.25.

The issues had lost about 12% to 12.5% in the previous trading day alone.

Legacy Reserves LP’s 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units were meantime up a dollar, or 6.1%, at $17.40.

As for oil, West Texas Intermediate crude fell $1.38, or 2.26%, to $59.56 per barrel – the first time the commodity has traded below $60 since 2009. Brent crude declined 74 cents, or 1.15%, to $63.50.

Oil prices were said to be dragged down yet again as investors grew concerned about Saudi Arabia’s hesitance to cut production, even as OPEC cut its demand outlook for 2015.

In recent deals, TravelCenters of America LLC’s $120 million of 8% $25-par senior notes due 2029 were “moving up a hair,” a trader said.

He pegged the issue at $24.75 bid, $24.80 offered early in the day. After the close, another source placed the notes at $24.75.

The issue closed at $24.68 bid, $24.72 offered the day before.

The notes priced Tuesday, coming upsized and at the tight end of talk.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC and UBS Securities LLC ran the books.

The trader said he doubted any other deals would be launched for the remainder of the week.

“Maybe we’ll see one or two next week,” he speculated. “But it should be kind of quiet for the rest of the year.”

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