Market expected to be muted ahead of holiday; recent deals trade up; GSE paper softens

By Stephanie N. Rotondo

Seattle, Aug. 29 – Preferred stock traders were forecasting a quiet week ahead of Labor Day weekend.

The market opened Monday’s session a touch softer, with the Wells Fargo Hybrid and Preferred Securities index trading down 1 basis point. The index eventually ended 5 bps higher.

Issues priced during August continued to gain momentum.

Qwest Corp.’s $977.5 million of 6.5% $25-par notes due 2026 (NYSE: CTBB) – consisting of $850 million sold on Aug. 11 and a fully exercised greenshoe of $127.5 million – were dominating the day in early trading, rising 9 cents to $25.76. The issue ended the day up 11 cents at $25.78.

Legg Mason Global Asset Management’s $500 million of 5.45% $25-par junior subordinated notes due Sept. 15, 2056 (NYSE: LMHB) were meantime seen ticking up 4 cents to $25.05.

That deal came Aug. 3.

Among Entergy-linked deals, Entergy Louisiana LLC’s $270 million of 4.875% $25-par collateral trust mortgage bonds due Sept. 1, 2066 (NYSE: ELC) were pushing up a dime to $24.97, while Entergy Arkansas Inc.’s $410 million of 4.875% $25-par first mortgage bonds due Sept. 1, 2066 (NYSE: EAI) jumped 7 cents to par.

Bill Ackman made some optimistic comments about the future of Fannie Mae and Freddie Mac in his mid-2016 letter to Pershing Square shareholders.

The market, however, appeared nonplussed, as the GSEs’ preferreds weakened in Monday trading.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.