Morning Commentary: KeyCorp preferreds down with market; oil shippers in retreat; Saratoga on tap

By Stephanie N. Rotondo

Seattle, Dec. 12 – The preferred stock market was losing ground in early Monday trading.

The Wells Fargo Hybrid and Preferred Securities index was off 3 basis points at mid-morning.

KeyCorp’s $500 million of 6.125% series E fixed-to-floating rate noncumulative perpetual preferred stock, for instance, was down 12 cents in early dealings at $25.48.

While overall activity was muted, KeyCorp was one of the most actively traded issues as of mid-morning.

The deal came upsized on Dec. 5. It is trading under a temporary ticker, “KYYPP.”

A trader said that oil shipping companyies were “getting hit because of [Saudi Arabia’s] comments on oil production.”

The comments indicated that the country was willing to make deeper production cuts than those agreed to at a recent OPEC meeting that resulted in an agreement to stem output.

Teekay LNG Partners LP’s 9% series A cumulative redeemable preferred units (NYSE: TGPPA) were down 75 cents, or 3.18%, at $22.90.

In the primary, Saratoga Investment Corp. said it was bringing a $55 million offering of $25-par seven-year notes, a market source said.

Price talk is 6.75%, according to the source. The three-year non-callable paper “probably won’t price until Tuesday,” he added.

Ladenburg Thalmann & Co. Inc., BB&T Capital Markets, Compass Point and William Blair & Co. are running the books.

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