Preferreds try to rebound but end flat; Public Storage upsized; oil names under pressure

By Stephanie N. Rotondo

Seattle, Jan. 12 – The preferred stock market was attempting to rally in early Tuesday trading but turned down by the end of business.

“Everyone is trying to bounce it back here,” a trader said early in the session.

The Wells Fargo Hybrid and Preferred Securities index ended flat for the day, after trading up 7 basis points at mid-morning. But even once the index fell into the red, there were gyrations, ultimately ending with an unchanged finish.

A trader also noted that while there was some strength returning to the market, liquidity remained thin.

There were meantime signs of life in the primary space, as Public Storage brought $275 million of 5.4% series B cumulative perpetual preferred stock.

The deal – initially talked at 5.5% and coming via BofA Merrill Lynch, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC and UBS Securities LLC – marked the first to hit the tape in 2016.

The Public Storage deal was upsized from $75 million.

As oil prices continued to dip, oil and gas preferred paper was on the decline as well.

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) dropped 66 cents, or 14.01%, to $4.05. Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) meantime lost 81 cents, or 11.96%, closing at $5.96.

© 2015 Prospect News.
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