Investors watch Yellen, equities; Arbor Realty sells baby bonds; recent issues active

By Stephanie N. Rotondo

Phoenix, May 7 - Preferred stocks were modestly stronger as the midweek session began, even as a trader said investors were not focused on that part of the market.

"Everybody is listening to Yellen," he said, referring to Janet Yellen, head of the Federal Reserve, as she addressed the Joint Economic Committee.

Yellen said the central bank remained prepared to accommodate the U.S. economy, citing geo-politics and weak housing data as potential risks.

Also, the trader said investors were "watching the equity markets sell off."

Though down early, the equity markets did end up finishing the day mostly higher. As for the Wells Fargo Hybrid and Preferred Securities index, it was up 2 basis points as of mid-morning before closing 15 bps higher.

Arbor Realty Trust Inc. added a deal to the new issue pipeline Wednesday. The Uniondale, N.Y.-based real estate investment trust said it was offering $25-par senior notes due 2021. The deal priced shortly before the close, with $55 million notes being sold at par to yield 7.375%.

A trader said the notes were offered at less 35 cents in the early gray market. Post-pricing, a trader quoted the issue at $24.55 bid, $24.62 offered.

Deutsche Bank Securities Inc., Keefe Bruyette & Woods Inc. and MLV & Co. LLC are the joint bookrunning managers. Credit Suisse Securities (USA) Inc. is the senior co-manager, and JMP Securities LLC and Ladenburg Thalmann & Co. Inc. are the co-managers.

Meanwhile, Scorpio Tankers Inc. priced $50 million of 6.75% senior notes due 2020. However, a trader said the deal was not generating a lot of buzz.

He saw the issue trading around $24.73.

As for American Capital Agency Corp.'s $175 million of 7.75% series B cumulative redeemable preferreds, they were quoted at $24.60 bid, $24.70 offered.

A trader said the preferreds were assigned a temporary trading symbol, "AGNCL."

That issue priced late Monday.

Recent issues stay busy

Though volume was generally on the modest side during midweek trading, investors continued to focus on recent new deals.

The Goldman Sachs Group Inc.'s $700 million of 6.375% series K fixed-to-floating rate noncumulative perpetual preferreds (NYSE: GSPK) saw about 1.13 million shares change hands, as the paper ended the day off a dime at $25.44. Regions Financial Corp.'s $500 million of 6.375% series B fixed-to-floating rate noncumulative perpetual preferreds (NYSE: RFPB) meantime saw trades of over 900,000 shares.

That issue ended down a penny at $24.96.

Goldman priced April 21, and Regions came April 24.

However, it was Wells Fargo & Co.'s 5.85% series Q fixed-to-floating rate noncumulative preferreds (NYSE: WFCPQ) - not a recently priced deal - that dominated secondary trading, as about 2.27 million shares were exchanged.

The preferreds closed unchanged at $25.60.

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