Preferreds improve amid China’s stock rebound, optimism about Greece; Land O’Lakes eyed

By Stephanie N. Rotondo

Phoenix, July 9 – Preferred stocks were lifted Thursday as an overnight rebound in Chinese stocks helped push up the markets across the board.

Regulators in Shanghai imposed new supportive measures on Thursday, including restrictions on short selling and an easing of margin lending regulations. The moves helped to snap a five-day equity sell-off.

Additionally, investors remained hopeful that Greece would get some sort of debt deal done in the next couple of days.

The Wells Fargo Hybrid and Preferred Securities index closed 13 basis points higher.

Despite the return of strength to the market, a trader said overall activity remained muted. In talking with other market players, he said the consensus was that “everybody’s short the same things and everybody’s long the same things.”

Given the volatility of the week, the new issue market has been radio silent. But Land O’Lakes Inc. is “doing supposed non-deal roadshows,” a market source said, for a $150 million offering of 8% $1,000-par series A cumulative redeemable preferreds.

However, the source noted that such roadshows are “never really non-deal... The question is what is the delay before they actually do it.”

Standard & Poor’s has assigned a BB rating to the proposed new issue.

On June 29, the Arden Hills, Minn.-based agricultural company announced it was merging with United Suppliers Inc. of Ames, Iowa.

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