Preferreds ‘back to snoozeville’; Fannie, Freddie remain firm; Capital One sees growth

By Stephanie N. Rotondo

Phoenix, July 18 – After a volatile session on Thursday – spurred in part by the Malaysian Airlines crash in Ukraine – preferred stocks were “back to snoozeville” early Friday, according to a trader.

“Things aren’t moving around too much,” he said.

The Wells Fargo Hybrid and Preferred Securities index closed Friday’s session up 11 basis points. It was up 4 bps at mid-morning.

The index ended down 30 bps on Thursday.

Fannie Mae and Freddie Mac paper continued to gain momentum in Friday dealings. The mortgage buyers have been making headlines this week as yet another new bill to wind down the companies was introduced by a trio of House Democrats and a judge overseeing Fairholme Capital’s case against the government in regards to its conservatorship jumped a hurdle.

The judge granted Fairholme a broader range in the discovery process. Fairholme is attempting to prove that the government’s actions in placing the firms under conservatorship were not lawful.

Fannie’s 8.25% series S fixed-to-floating-rate noncumulative preferreds (OTCBB: FNMAS) finished up a quarter, or 2.26%, at $11.33. Freddie’s 8.375% fixed-to-floating-rate noncumulative perpetual preferreds (OTCBB: FMCKJ) rose 27 cents, or 2.31%, to $11.95.

Capital One Financial Corp.’s 6.25% series C noncumulative perpetual preferreds (NYSE: COFPC) traded actively and better Friday in response to the company’s second-quarter earnings.

The preferreds ended the day up a dime at $24.73, on trading of over 1.5 million shares.

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