Preferred stock market improves; Global Indemnity finishes higher; Fannie flips for gain

By Colin Hanner

Chicago, March 24 – Preferred stocks trended slightly higher on moderate trading volume on Friday as the market kept its focus on Congress and its efforts to pass new health care legislation.

The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points, down 2 bps from mid-morning, while the U.S. iShares Preferred Stock ETF was up 3 bps, coming down from 46 bps in the morning.

“I think a lot people were focused on what was going on in Washington, and what impact that is likely to have,” a market source said.

“Everyone has their eye on this health care reform bill, whether it gets passed or not,” a trader said.

The health care bill in question was shelved for the second-straight day on the grounds that it would not have garnered enough votes in the House to move onto the Senate.

President Donald Trump told Congress on Thursday evening that if the bill did not pass, the Affordable Care Act, or Obamacare, would stay in place, though as news broke that no vote would take place, there is still much uncertainty surrounding the bill.

In the new deal space, Global Indemnity Ltd.’s $120 million of 7.875% $25-par subordinated notes due 2047 closed up 5 cents at $24.87, a market source said, with “no reports of a symbol” coming soon, a trader said.

In the secondary market, Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were up 15 cents, or 2.22%, to $6.90.

GMAC Capital Trust I’s 8.125% series 2 fixed-to-floating rate trust preferreds (NYSE: ALLYPrA) were off 3 cents, or 0.12%, to $25.32.

And two preferred securities traded mixed for Deutsche Bank on the session.

Deutsche Bank Contingent Capital Trust II’s 6.55% trust preferred securities (NYSE: DXB) were down 6 cents, or 0.24%, to $24.84.

And Deutsche Bank Contingent Capital Trust III’s 7.6% trust preferred securities (NYSE: DTK) were up 4 cents, or 0.15%, to $25.97.

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