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Midday Commentary: Investors watch Yellen, equities over preferreds; Arbor Realty to tap market
By Stephanie N. Rotondo
Phoenix, May 7 - Preferred stocks were modestly stronger as the midweek session began, even as a trader said investors were not focused on that part of the market.
"Everybody is listening to Yellen," he said, referring to Janet Yellen, head of the Federal Reserve, as she addressed the Joint Economic Committee.
Yellen said the central bank remained prepared to accommodate the U.S. economy, citing geo-politics and weak housing data as potential risks.
Also, the trader said investors were "watching the equity markets sell off."
The Wells Fargo Hybrid and Preferred Securities Index was up 2 basis points as of mid-morning.
Arbor Realty Trust Inc. added a deal to the new issue pipeline Wednesday. The Uniondale, N.Y.-based real estate investment trust said it was offering $25-par senior notes due 2021.
A trader said the notes were offered at less 35 cents in the gray market.
Deutsche Bank Securities Inc., Keefe Bruyette & Woods Inc. and MLV & Co. LLC are the joint bookrunning managers. Credit Suisse Securities (USA) Inc. is the senior co-manager, and JMP Securities LLC and Ladenburg Thalmann & Co. Inc. are the co-managers.
Meanwhile, Scorpio Tankers Inc. priced $50 million of 6.75% senior notes due 2020. However, a trader said the deal was not generating a lot of buzz.
He saw the issue trading around $24.73.
As for American Capital Agency Corp.'s $175 million of 7.75% series B cumulative redeemable preferreds, they were quoted at $24.60 bid, $24.70 offered.
A trader said the preferreds were assigned a temporary trading symbol, "AGNCL."
That issue priced late Monday.
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