Fannie Mae, Freddie Mac active in trading; IberiaBank trades; Huntington, Hercules climb

By Christine Van Dusen

Atlanta, May 5 – Recent new issues from IberiaBank Corp. and Huntington Bancshares Inc. were among the most actively traded on a flat Thursday for the preferred stock market, as most investors awaited the new payrolls report from the United States.

“There’s a loss of conviction,” a market source said. “People are waiting for the job report, and other than that, there’s clearly a lack of news. We’re coming off bank earnings season.”

Indeed, earnings reports from Fannie Mae and Freddie Mac led to mixed performance on Thursday morning. Fannie posted stronger earnings and Freddie released weaker results.

“We've seen a mixed sell-off in those issues,” a trader said.

By late-morning, though, both names were down 4 cents in trading, with Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) spotted at $3.70 on Thursday morning, following Wednesday’s $3.74, and closed at about $3.77.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FNMAS) were seen at $3.80 on Thursday before closing at $3.84, flat to Wednesday.

For the quarter, Fannie reported net income of $1.1 billion while Freddie reported a net loss of $354 million, compared to a profit of $524 million the year before.

In other trading, the new issue from IberiaBank – $50 million 6.6% series C fixed-to-floating rate noncumulative perpetual preferred stock via Keefe, Bruyette & Woods and BofA Merrill Lynch – received some attention.

“That’s been trading between $25.20 and $25.30,” the trader said in the morning.

Another market source quoted the notes at $25.30 at the close.

The bank’s 6.625% series B fixed-to-floating rate noncumulative perpetual preferreds (Nasdaq: IBKCP) traded Thursday morning at $25.57, then closed at $25.70, up 15 cents.

Huntington closes higher

Huntington Bancshares’ new $200 million of its 6.25% series D noncumulative perpetual preferred stock (Nasdaq: HBANO) traded Thursday morning at $26.11, then closed at $26.08, up 7 cents.

The Columbus, Ohio-based bank announced the offering late Monday. Huntington initially sold $350 million of the preferreds on March 14. Another $50 million of a $52.5 million greenshoe was exercised, lifting total issuance to $400 million.

Wells Fargo Securities LLC ran the books on the add-on deal. BofA Merrill Lynch, Morgan Stanley & Co. LLC, UBS Securities LLC and the Huntington Investment Co. were joint lead managers.

Hercules preferreds rise

Hercules Capital Inc. saw its $65.4 million add-on to its 6.25% $25-par notes due 2024 (NYSE: HTGX) trade for most of Thursday – and close – at $25.04, up 7 cents.

Prior to the add-on, there were $103 million of the notes outstanding. Including the add-on and the exercised over-allotment option, the total outstanding amount is $175.9 million.

Hercules – formerly Hercules Technology Growth Capital Inc. – is a Palo Alto, Calif.-based specialty finance company.

“We’re still waiting to see more new issues,” the trader said.

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