Preferred market remains weak as oil declines; Medley a no-show; GE Capital notes decline

By Stephanie N. Rotondo

Seattle, Dec. 11 – The preferred stock market continued to be pressured in Friday trading.

“Everyone is still focused on oil and that’s putting a lot of pressure on the markets,” a trader said.

Domestic crude oil prices were down nearly 3.5% on Friday, which in turn caused the common equity exchanges to be off close to 2% across the board.

For its part, the Wells Fargo Hybrid and Preferred Securities index dropped 36 basis points.

In the primary space, Medley Capital Corp.’s planned offering of $25-par notes due Jan. 15, 2021 had not yet priced, a trader reported, though he heard that the deal could price during the session.

However, given the tone of the market, it was no surprise when the deal failed to show.

The New York-based business development company announced the offering on Thursday.

Keefe Bruyette & Woods Inc., Deutsche Bank Securities Inc., Sandler O’Neill & Partners LP and Janney Montgomery Scott LLC are running the books.

General Electric Capital Corp.’s 4.7% $25-par notes due 2053 (NYSE: GEK) declined on Friday, though a market source noted that the weakness was not all based on the overall losses for the day.

The notes closed off 13 cents at $25.35.

The source said that GE Capital’s preferreds have dropped 7 to 10 points in the last week and a half in response to a mandatory conversion of the issues into new preferred shares with lower coupons.

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