Midday Commentary: Full Circle, Miller deals lackluster; Principal Financial preferreds see gains

By Stephanie N. Rotondo

Phoenix, June 27 - The recent selloff in the preferred market "has ceased for now," a trader said Thursday.

He added that the new issue market continued to be "dead" on Thursday, as recent small deals from Full Circle Capital Corp. and Miller Energy Resources Inc. weren't seeing much play.

"I know there are some buyers lined up below par" for Full Circle's new $18.75 million of 8.25% $25-par notes due 2020. "But there aren't any offers."

The deal came on Tuesday.

Miller Energy meantime priced an $8.73 million add-on to its 10.75% series C cumulative redeemable preferreds early on Thursday.

"I don't think anyone really cared," a trader said.

The shares were sold at a discounted price of $21.50. By midday, the listed preferreds (NYSE: MILLPC) were down 53 cents, or 2.46%, at $21.00.

The issue had hit a low of $20.10 early in the session.

As for the secondary market, it was seeing a "nice rebound," according to a trader.

Principal Financial Group Inc.'s floating-rate series A $100-par preferreds (OTCBB: PFGZP) were "trading a bunch," continuing a trend that began on Wednesday.

The preferreds were up $3.95, or 4.26%, at midday, trading at $96.90.

On Thursday, the Des Moines, Iowa-based investment management company said it had reached a deal with BofI Federal Bank in which Principal would transfer some of its individual checking accounts and non-IRA savings, money market and CD accounts to Bofl.

Principal is currently transforming itself into a limited purpose trust institution.

Elsewhere in the secondary, a trader said Fannie Mae and Freddie Mac paper had "stabilized" following a two-day retreat sparked by the introduction of the Corker bill into the Senate on Tuesday.

The bill would liquidate the two mortgage giants within five years.

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