Conference comments lift Fannie Mae, Freddie Mac; DynaGas flat; Citigroup series K active

By Christine Van Dusen

Atlanta, July 15 – Preferred stock from Fannie Mae and Freddie Mac got a boost on an up Wednesday for the market as investors focused on better-than-expected economic data from China and comments from Federal Reserve chairman Janet Yellen.

Yellen, in prepared testimony that would be delivered later on Wednesday, said that if the economy moves as expected, the Fed is on track to raise rates.

Meanwhile, Fannie Mae and Freddie Mac were described as “exciting” during the Seeking Alpha conference the news site is having with Institutional Investor.

“So those are jumping 45 cents to 50 cents each,” a trader said. “That’s pretty good for them.”

The market, overall, was up about 24 basis points, or 6 cents, a market source said.

Other preferreds didn't move much on Wednesday, with the new issue from Monaco-based DynaGas LNG Partners LP trading between $24.50 and $24.52, flat to Tuesday, he said.

DynaGas LNG priced $75 million of 9% series A cumulative redeemable preferred units at par of $25.00 via Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) Inc., Stifel Nicolaus & Co. and DNB Markets on Monday.

Distributions will be made on the 12th day of February, May, August and November. On or after Aug. 12, 2020, the company can redeem the units at par plus accrued distributions.

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.

On Tuesday the new preferreds were seen trading at $24.65 offered, the trader said.

Wintrust moves up

In other trading, the new issue of preferred stock from Illinois-based Wintrust Financial Corp. – $125 million of 6.5% series D fixed-to-floating rate noncumulative perpetual preferred stock – traded at $24.64, up 3 cents on very low volume.

Incapital LLC and U.S. Bancorp Investments Inc. were the joint bookrunners for the deal, which priced on June 22.

Volumes improve

Volumes, overall, were stronger on Wednesday but still “not great,” a market source said at the close.

“Not great, but improved relative to where we had been the last couple of weeks,” he said.

Citigroup Inc.’s 6 7/8% floating-rate noncumulative preferred, series K, was the most active issue on Wednesday afternoon, up 5 cents to $26.75 on 1.07 million shares traded.

Goldman Sachs Group Inc.’s depository preferred, series K, moved up 9 cents to $26.32 on 461,000 shares traded.

And Wells Fargo & Co.’s depository preferred, series Q, dipped 4 cents to $25.65 on 342,000 shares traded.

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