Preferred market improves amid heavy oil prices; stocks sink; RBS preferreds drift lower

By Stephanie N. Rotondo

Phoenix, Jan. 12 – The preferred stock market was fluctuating a bit in Monday trading, opening the day up, coming back to flat at mid-morning and then rising again by the end of business.

The Wells Fargo Hybrid and Preferred Securities index was up 8 basis points.

The moves in the preferred space came as oil prices were taking sizable hits once again. Both West Texas Intermediate and Brent crude lost over 5% on the day, trading with $45 and $47 handles, respectively.

“Oil keeps selling off, a couple bucks every day,” a trader said. “Anything tied to oil is getting hit.”

Among MLPs, Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were off $1.05, or 5.07%, to $19.66. Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) were down 61 cents, or 3.02%, at $19.61.

Meanwhile, Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) declined 83 cents, or 9.14%, to $8.25, as the 9.75% series D cumulative preferreds (NYSE: GDPPD) dropped 40 cents, or 5%, to $7.60.

Meanwhile, Royal Bank of Scotland Group plc’s preferreds were mostly weaker in Monday trading, despite news out over the weekend indicating the bank was considering exiting Asia – a move that would “be good for them,” according to a market source.

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