Midday Commentary: Preferred stock pull-back continues after Treasury dip; recent deals taking hits

By Stephanie N. Rotondo

Phoenix, May 30 - After a busy midweek session, Thursday's preferred stock market was quieting down, according to one trader.

"Yesterday was very busy," the trader said. "Today it's quiet throughout. People are digesting yesterday, I guess."

The trader also noted that he had heard talk of a new deal during Thursday's session, "but that got snubbed out."

He was not sure of the identity of the potential issuer.

With the recent pull-back in Treasuries, many recently priced preferred deals were trading down at lower levels.

Entergy Arkansas Inc.'s $125 million of 4.75% $25-par notes due 2063, for example, were trading at $24.35 at midday.

"Other Entergy issues got hit too," a trader said, referring to the paper's reaction to the Treasury bond dip.

The Arkansas deal came on Tuesday.

National Retail Properties Inc.'s $250 million of 5.7% series E cumulative preferreds - a deal that came May 22 - were meantime seen at $24.85 bid, while New York Mortgage Trust Inc.'s $75 million of 7.75% series B cumulative redeemable preferreds were at $24.58 bid.

The New York Mortgage issue came Tuesday.

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