Midday Commentary: Preferreds continue to firm; VantageSouth planning new issue to repay TARP

By Stephanie N. Rotondo

Phoenix, Aug. 21 - Preferred stocks continued to be better Wednesday after a "strong performance" on Tuesday, a trader said.

"The long-bond is down a little bit, but preferreds are having a little bit of a second-day bounce," he said.

The trader added that he expected the market to sell off on the back of housing numbers - existing home sales rose 6.5% in July - "which it did," he said. But then things rebounded and continued to firm.

Late Tuesday, VantageSouth Bancshares Inc. filed an S-1 with the Securities and Exchange Commission registering up to $50 million of new fixed-to-floating rate noncumulative perpetual preferreds.

The company said it will use proceeds from the sale to buy back TARP preferreds and warrants.

But a trader said he had not seen any markets for the paper, nor had he heard any price talk.

Meanwhile, Goodrich Petroleum Corp.'s $120 million of 9.75% series D cumulative preferreds - a deal that priced Aug. 14 - listed on the New York Stock Exchange on Wednesday.

The ticker symbol is "GDPPD." The preferreds were trading at $24.89 at midday, up 9 cents from the previous day.

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