Bank of America sells $1 billion preferreds; investors return to the market; energy names rise

By Christine Van Dusen

Atlanta, Jan. 21 – Bank of America Corp. priced $1 billion of new preferred stock in an up-and-down Thursday for the market, which saw investors – who are coming to terms with the oil-price environment – slowly return to trading and provide a small boost to beleaguered issues.

“People are putting a toe back in the water,” a trader said. “Everything is kind of mixed.”

Housing-related names, which got “smashed” on Wednesday, bounced back on Thursday. Case in point: Resource Capital Corp.'s 8.625% fixed-to-floating rate series C cumulative redeemable preferreds (NYSE: RSOPC) were down just 3 cents to $13.65 on Thursday morning. By the close, the notes were up 59 cents to $14.27.

Some energy-linked paper also rebounded on Thursday, following soothing comments from Morgan Stanley’s chief executive officer, who said that supply and demand for oil will eventually rebalance. Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) moved up 21 cents to $4.18. The securities closed at $4.28.

Other energy-related names were mixed. Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) were up 84 cents to $3.58, then later dipped to $3.31.

And Legacy Reserves LP’s series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) moved higher by 54 cents to $3.12 on Thursday morning before dropping back to $2.30.

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