Preferred stocks see strong kick-off to 2017; GSEs active; Vanguard, Legacy rise with oil prices

By Stephanie N. Rotondo

Seattle, Jan. 3 – The preferred stock market had a firm tone as 2017 began, though on “light volumes,” a trader said.

The trader attributed the limited liquidity to it being the first real day back from the holidays.

The Wells Fargo Hybrid and Preferred Securities Index closed 67 basis points higher. The index was up 26 bps at mid-morning.

As for the day’s dealings, Fannie Mae and Freddie Mac were among the day’s most active issues – though less active than they have been in the last couple of months.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) traded off 15 cents, or 1.88%, to $7.85. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ), however, were up 13 cents, or 1.72%, at $7.62.

Meanwhile, oil and gas names were up for the session, following the day’s initial gains in crude oil prices. While crude eventually settled at a two-week low – due to a strengthening dollar – oil-linked preferreds held on to their gains.

Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) finished up 13 cents, or 4.81%, at $2.83. Legacy Reserves LP’s 8% series B cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) firmed 95 cents, or 11.96%, to $8.89.

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