Preferreds end week in the red; Public Storage, GE’s remaining baby bond down

By Abigail W. Adams

Portland, Me., Feb. 2 – Friday was another down day for preferreds in a week that has seen more down days than up. Both the Wells Fargo Hybrid & Preferred Securities Financial index and the U.S. iShares Preferred Stock ETF closed Friday’s session with losses.

Public Storage’s depositary preferreds saw large losses alongside the broader market.

After a two-day rise, General Electric Co.’s remaining baby bond in the market stumbled during Friday session.

The 4.7% notes due 2053, which trades under the symbol “GEK,” made large gains after General Electric called its two other baby bonds.

Red week

The preferreds market was no stranger to the woes felt by the Dow Jones Industrial Average and the S&P, ending Friday in the red, which is where it spent much of the week.

The Wells Fargo Hybrid & Preferred Securities Financial index was down 9 basis points and the U.S. iShares Preferred Stock ETF was down 0.70% at the market close Friday.

The overall market has been in the red for much of the week.

Public Storage

Public Storage’s series of depositary preferreds saw large losses as the broader market struggled.

Public Storage’s depositary preferred representing 1/1000th of a share of the company’s 5.125% series C cumulative preferred stock was down 31 cents, or 1.33%, to $23.32 in early trading Friday.

The depositary preferreds cut their losses slightly throughout Friday’s session, ending the day down 25 cents, or 1.06%, to $23.38.

Public Storage’s depositary preferred representing 1/1000th of a share of the company’s 4.95% series D cumulative preferred stock was down 48 cents, or 2.10%, to $22.57 in early trading Friday.

The depositary preferreds continued to trade down and ended Friday’s session at $22.52, a decrease of 53 cents, or 2.30%.

Public Storage’s depositary preferred representing 1/1000th of a share of the company’s 4.9% series E cumulative redeemable preferred stock was down 41 cents, or 1.80%, to $22.43 in early trading, which is where they remained at the end of the day.

Public Storage’s depositary preferred representing 1/1000th of a share of the company’s 5.15% series F preferred share of beneficial interest was down 45 cents, or 1.92%, to $23.09. The depositary preferreds regained some footing, ending the day at $23.12, a decrease of 42 cents, or 1.80%.

Public Storage’s depositary preferred representing 1/1000th of a share of the company’s 5.05% series G cumulative preferred share of beneficial interest was down 42 cents, or 1.81%, to $22.69.

They also regained some footing, ending the day at $22.77, a decrease of 34 cents, or 1.47%.

GE’s baby bond

After soaring on news that General Electric had called two of its baby bonds, General Electric’s 4.7% notes due 2053 was down on Friday.

The notes closed Friday’s session at $24.76, a decrease of 7 cents, or 0.28%. The 4.7% notes were up 8 cents, or 0.32%, on Thursday and 140 cents, or 6%, on Wednesday.

General Electric submitted redemption notices for its 4.875% notes due 2052, which trade under the ticker “GEB,” and 4.875% notes due 2053, which traded under the ticker “GEH,” after the market close Tuesday.

GE’s decision to redeem GEB and GEH was largely due to the downsizing of the company’s legacy assets, which reduced its need for funding.

While the baby bonds were trading at a discount, they were still too high for a tender or repurchase, solidifying GE’s decision to redeem them, a market source said.

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