Preferreds edge up amid Brexit vote; American Homes deal gets a symbol; BOK above par

By Stephanie N. Rotondo

Seattle, June 23 – The preferred stock market was trending upward on Thursday as the pending “Brexit” vote got underway in the United Kingdom.

“Everybody is guess that they are staying,” a trader said. As such, the broader markets were gaining ground.

For its part, the Wells Fargo Hybrid and Preferred Securities index was up 13 basis points.

Assuming the U.K. votes to stay in the European Union – final results are expected early Friday – it could spark another round of new issuance, the trader opined.

Domestically, bank stress tests are getting ready to be released. That also could result in a steady flow of deals, as financial institutions look to take out more expensive paper and replace it with cheaper yields, the trader said.

In trading, American Homes 4 Rent’s $200 million of 6.35% series E cumulative redeemable preferreds – an issue priced early Wednesday – were seen at $25.02 at mid-morning. However, the paper came in by the bell, closing at $24.90.

The closing level was down 9 cents on the day.

A trader said the issue had been assigned a temporary ticker, “AHMRP.”

The deal came upsized from $100 million and tighter than the 6.375% to 6.5% price talk.

Wells Fargo Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and Raymond James & Associates Inc. ran the books.

Meanwhile, BOK Financial Corp.’s $150 million of 5.375% $25-par subordinated notes due 2056 were offered at par early in the session, according to a trader.

At the close, another market source said the notes finished at $25.42, “which was around the high for the day.” He added that the volume weighted average price was $25.0147.

That deal came Monday via Morgan Stanley, BofA Merrill Lynch, BOSC Inc. and Wells Fargo.

All the reopenings

Gladstone Commercial Corp. said early Thursday that it had inked an “at-the-market” sales agreement with Cantor Fitzgerald & Co. to sell up to $50 million of its 7% series D cumulative redeemable preferred stock (Nasdaq: GOODM)

In the wake of the news, the issue dipped 15 cents to $25.50.

The reopening came on the heels of Hercules Capital Inc.’s own add-on offering of $60 million of its 6.25% $25-par notes due 2024 (NYSE: HTGX) on Wednesday.

The add-on brought the total amount outstanding to $235,945,000, including the initial $103 million sold on July 14, 2014 and the $72,945,000 sold on May 2.

Those notes closed unchanged on the day at $25.22. However, that was up 2 cents from opening levels of $25.20.

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