Morning Commentary: Preferreds inch higher as Greece, creditors hammer out a deal; DynaGas on tap

By Stephanie N. Rotondo

Phoenix, July 13 – Preferred stocks were trending modestly higher early Monday as the market hoped a Greek debt deal would get done.

The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points at mid-morning.

Greece and its E.U. creditors reportedly hashed out a deal late Sunday. Details of what that deal entails have been fuzzy, but it has been reported that this bailout – the third the country has wrangled – includes the harshest terms yet.

The rescue package still needs to be passed by Greek parliament.

The news did seem to appease investors, however, and the preferred stock market kicked off the week with a new offering hitting the tape.

DynaGas LNG Partners LP announced an offering of series A cumulative redeemable preferred units.

Morgan Stanley & Co. LLC is the lead on the deal.

“I like that Morgan Stanley is comfortable bringing a new deal, so that’s good,” a trader said, seeing a $24.55 bid, $24.70 offered gray market quote for the units.

Other joint bookrunners include Credit Suisse Securities (USA) Inc., Stifel Nicolaus & Co. and DNB Markets.

Price talk is 9% to 9.125% on the non-rated deal.

Proceeds will be used with borrowings under a new secured debt facility to finance the purchase price of an optional vessel acquisition. Should that acquisition fail, the funds will be used for general partnership purposes, including working capital.

DynaGas is a Monaco-based growth-oriented limited partnership focused on owning and operating LNG carriers.

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