Preferred market finishes flat as desks empty for vacations; Invesco, Arch Capital list

By Stephanie N. Rotondo

Seattle, Aug. 21 – The preferred stock market attempted to end with a positive tone on Monday but eventually gave up the early modest gains to close a touch weaker.

The Wells Fargo Hybrid and Preferred Securities index finished off 1 basis point, after being up 1 bp at mid-morning. The U.S. iShares Preferred Stock ETF meantime ended 3 bps lower, though it was up 8 bps earlier in the day.

“It was pretty much flat today,” a market source said. He noted that things were dying down in the second half of the month.

“The next two weeks are probably the biggest vacation weeks,” he said. “I’m expecting it to be very, very quiet until the Wednesday after Labor Day.”

As for the day’s dealings, recently priced issues were getting listed.

Invesco Mortgage Capital Inc.’s $250 million of 7.5% fixed-to-floating rate series C cumulative redeemable preferred stock – a deal priced Aug. 9 – entered the established secondary on Monday, listing on the New York Stock Exchange under the ticker symbol “IVRPrC.”

Paper was trading at $24.95, down a dime.

The deal came Aug. 9. Price talk was initially 7.625%, according to a market source. However, that was later revised to 7.5% to 7.625%.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and J.P. Morgan Securities LLC are the joint bookrunners.

Arch Capital Group Ltd.’s $200 million of 5.45% series F noncumulative preferred stock listed on the Nasdaq Global Select Market.

The ticker symbol is “ACGLO.”

Unlike the Invesco issue, the paper moved up to $24.99, which compared to $24.89 at the open.

The deal priced Aug. 14. Price talk was initially around 5.5%. It was later revised to 5.45%.

The deal was also upsized from $150 million.

BofA Merrill Lynch, Morgan Stanley, Wells Fargo Securities LLC and JPMorgan are the joint bookrunners.

Elsewhere in the secondary, Kimco Realty Corp.’s $225 million of 5.125% class L cumulative redeemable preferred stock (NYSE: KIMPrL) were also lower, fading a dime to $24.75.

That issue listed on the NYSE on Thursday after pricing on Aug. 7.

Away from recent issues, Citigroup Inc.’s 7.875% fixed-to-floating rate trust preferred securities (NYSE: CPrN) were trading actively. But like Invesco and Kimco, the preferreds were losing ground, falling 13 cents to $27.20.

There was no fresh news to cause the activity or the downward move.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.