Preferreds soft to start week; Eagle Point selling $25-pars; Morgan Stanley declines

By Stephanie N. Rotondo

Seattle, Nov. 30 – Preferred stocks were weak going into the month-end trading session.

The Wells Fargo Hybrid and Preferred Securities index ended down 20 basis points. The index was down 14 bps early Monday morning.

The softness comes as investors look to a week of new data, including the Federal Reserve’s release of its Beige Book, as well as a jobs report for November.

The Beige Book figures come out Wednesday, and the jobs number will be released on Friday.

It was not incredibly active [nor was there] a positive tone to today,” a market source said. Still, he noted that it “could have been worse, especially for the first day back from a holiday weekend and it being the last day of the month.”

In the day’s primary dealings, Eagle Point Credit Co. Inc. announced plans to sell at least $25 million of $25-par unsecured notes due 2020.

Price talk is around 6.625%, according to a market source.

Incapital LLC is running the books.

“I don’t think much is going on in it,” a trader said at mid-morning, adding that he had not seen any gray markets for paper.

“Incapital isn’t often the lead, so I think it might be more of a best-efforts deal,” the trader remarked.

Pricing is expected this week.

Meanwhile, Maiden Holdings Ltd.’s $150 million of 7.125% series C noncumulative perpetual preference shares – a deal that priced Nov. 18 via Morgan Stanley & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC – was moving up following its listing on the New York Stock Exchange on Friday.

The ticker symbol is “MHPC.”

The shares closed at $24.97, up 7 cents. A trader quoted the issue at $24.92 bid, $24.94 offered at mid-morning.

Morgan Stanley axing jobs

Morgan Stanley & Co. Inc.’s preferreds finished the day down with the market and in the wake of news of job cuts at the investment bank.

The floating-rate series A noncumulative preferreds (NYSE: MSPA) fell 6 cents to $20.77, as the 7.125% series E fixed-to-floating rate noncumulative preferreds (NYSE: MSPE) declined 9 cents to $28.40. The 6.375% series I fixed-to-floating rate noncumulative preferreds (NYSE: MSPI) slipped a penny to $26.39.

Bloomberg reported Monday that Morgan Stanley was planning to cut 25% of its fixed-income jobs – a move that comes after the firm reported a 42% decline in fixed-income trading in the third quarter.

The cuts are expected to take place in the next two weeks and will impact all regions.

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