Fed’s ‘non-action’ boosts preferreds; Goodrich preferreds retreat; Wells Fargo active

By Stephanie N. Rotondo

Phoenix, Sept. 18 – Preferred stocks “moved up a little bit because of non-action on the part of the Fed,” a trader said early Friday.

The Wells Fargo Hybrid and Preferred Securities index saw “a slow climb up to 19 basis points [better],” one market source said. The index did give back some of its gains, closing up 13 bps.

On Thursday, the Federal Reserve decided to keep short-term interest rates steady for the time being, citing global economic concerns and recent volatility in domestic markets. And while the decision is seen as a boon to preferred stock issuers – “we will probably start seeing some new issues coming out the beginning of next week,” a trader said – the uncertainty caused the broader equity markets to weaken.

Meanwhile, Goodrich Petroleum Corp.’s 10% series C cumulative preferreds (NYSE: GDPPC) ended down 18 cents, or 10.4%, at $1.55. The preferreds were off 11 cents, or 6.4%, at $1.62 at mid-morning.

The 9.75% series D cumulative preferreds (NYSE: GDPPD) were initially down 11 cents, or 6.5%, at $1.58 at mid-morning, but recovered to end unchanged at $1.69.

While overall liquidity remained subdued on Friday, investors continued to be focused on recently priced deals – Wells Fargo & Co.’s $900 million of 6% series V class A noncumulative preferreds (NYSE: WFCPV) in particular.

That issue dominated trading among listed and paying securities for the day, closing up 4 cents at $25.07.

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