Preferred stocks mixed; recent issues still busy, but less so; Fannie, Freddie weaken

By Stephanie N. Rotondo

Seattle, June 15 – Preferred stocks were on the mixed side on Thursday, just one day after the Federal Reserve announced an interest rate increase.

The Wells Fargo Hybrid and Preferred Securities index slipped 1 basis point. The U.S. iShares Preferred Stock ETF was up 13 bps.

One market source remarked that he expected trading volumes – which have been limited of late – “to pick up in the wake of the Fed decision.

“That seems to have not been the case,” he added.

Among recently priced but still not listed issues, Validus Holdings Ltd.’s $250 million of 5.8% series B noncumulative preference shares softened on the day, closing down 12 cents at $25.15.

NGL Energy Partners LP’s $185 million of 9% class B fixed-to-floating rate cumulative redeemable preferreds were initially lower but eventually finished up 9 cents at $24.90.

But for the first time all week, it wasn’t those recently priced deals that made up the bulk of trading.

Freddie Mac’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) were actually the day’s most active issue, with over 1.07 million shares exchanged.

The GSE’s preferreds fell a nickel to $5.83.

Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were also down a nickel at $6.10.

Over 605,000 of those shares traded during the session.

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