Energy Transfer’s new preferreds up with preferred market; Two Harbors off on takeover

By James McCandless

San Antonio, April 26 – Traders reported a lighter day in the preferred market with stocks largely higher as earnings statements are posted throughout the week.

Energy Transfer Partners, LP’s new preferred units traded up and led the market in volume.

Two Harbors Investment Corp.’s preferreds were slightly off after announcing the acquisition of CYS Investments, Inc.

AT&T, Inc.’s preferreds were down on the back of disappointing results in the company’s first quarter.

Energy Transfer gains

Energy Transfer’s recently priced $450 million of series C fixed-to-floating rate cumulative redeemable perpetual preferred units, with about 535,000 shares trading, led the preferred market in volume.

The deal was priced after market close last Wednesday with at 7.375% dividend.

The preferreds rose 10 cents to $24.70.

Two Harbors down

Two Harbors Investment’s 7.625% series B fixed-to-floating rate cumulative redeemable preferred stock ended the day slightly down as the company announced the acquisition of CYS Investments for $15 million in cash and an opportunity for CYS shareholders to exchange their common stock for Two Harbors common stock (see related story elsewhere in this issue).

The preferreds saw about 348,000 shares exchanged, rocketing past its average volume of about 38,000 shares.

The preferreds were down 2 cents to $24.82.

AT&T loses

AT&T’s 5.35% global notes due 2066 dropped on Thursday after the company posted disappointing earnings and revenue numbers in its first-quarter report on Wednesday. The company posted a $1 billion revenue loss and earnings of 85 cents per share that were 3 cents below analyst estimates.

The company has been hindered by negative news of late, including two separate antitrust battles with the Department of Justice. A trial over its attempted merger with Time Warner has been underway for weeks while a newer probe alleges that the company cooperated with Verizon to make it difficult for consumers to change wireless carriers.

The preferreds closed down 3 cents to $24.51.

Indexes up

The Wells Fargo Hybrid & Preferred Securities Financial index gained 0.15%, adding to the 0.08% gain seen early Thursday.

The iShares US Preferred Stock ETF rose 3 cents to close at $37.05.

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