Preferreds dive in final trades; Fannie Mae, Freddie Mac rebound; TravelCenters prices

By Stephanie N. Rotondo

Phoenix, Sept. 30 – The preferred stock market was bouncing back in midweek trading following two days of hefty losses.

However, a market source noted that “in the last couple of minutes,” the market took a downward turn, though he remarked he did not “think it was very meaningful.”

The Wells Fargo Hybrid and Preferred Securities index ended off 13 basis points, though its was up 13 bps at mid-morning. The index closed Tuesday’s session off 12 bps and down 24 bps on Monday.

The initial gains were due in part to a new jobs number that showed the private sector adding 200,000 jobs in September. A trader said the figure was “a little more promising” than what was expected.

Fannie Mae and Freddie Mac paper was also recuperating with the wider marketplace.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose a dime, or 2.11%, to $4.85, as Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) gained 11 cents, or 2.3%, to $4.90.

The new issue calendar saw a deal added as TravelCenters of America LLC announced plans to sell a minimum of $50 million $25-par senior notes due 2030. The deal was later upsized to $100 million and priced at par to yield 8%.

Price talk was 8% to 8.125%, according to a market source.

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