Preferred market firms; energy names gyrate as crude gains; recent new issues in focus

By Stephanie N. Rotondo

Seattle, May 12 – The preferred stock market was trending higher on Thursday, though the new issue pipeline remained quiet.

A trader said that he “thought we were going to see a deal today,” but as none had been announced, he opined the pipeline would be closed until Monday.

The Wells Fargo Hybrid and Preferred Securities index closed 6 basis points higher. The index was up 4 bps at mid-morning.

Yet another gain in crude oil was also helping energy sector preferreds initially inch upward, but paper eventually gave up their ground.

“Oil continues to eke up here,” a trader said.

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) were up 7.45 cents, or 7.23%, at $1.1045 in early trading. The rally came after two days of hefty losses following the company’s earnings release late Monday.

However, the losses continued to mount by the bell, as the units finished off over 5 cents, or 5.05%, at 97.8 cents.

Public Storage’s $200 million of 5.125% series C cumulative preferreds were seen offered at par in early trades. The paper closed up 8 cents at $24.98.

The issue priced Tuesday and is trading under a temporary ticker, “PBBSP.”

DuPont Fabros Technology Inc.’s $175 million of 6.625% series C cumulative redeemable preferreds were meantime pegged at $25.02 bid, $25.05 offered. That issue also priced Tuesday.

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