Morning Commentary: Holiday weighs on market liquidity; Southern firms; Magnum Hunter nosedives

By Stephanie N. Rotondo

Phoenix, Oct. 12 – The preferred stock market was modestly higher in early Monday trading, though activity was subdued given the Columbus Day holiday.

“Everyone is asleep today,” a trader said.

The Wells Fargo Hybrid and Preferred Securities Index was up 6 basis points at mid-morning.

Given the firm tone, Southern Co.’s $1 billion of 6.25% $25-par series 2015A junior subordinated notes due 2075 (NYSE: SOJA) “traded up to $25.30,” according to a trader.

Meanwhile, Magnum Hunter Resources Corp. announced late Friday that it had hired advisors to explore its strategic options. As part of that effort, the company elected to suspend the dividend on its preferred shares.

“So those all got rocked down from $6 to $3,” a trader said.

The 8% series D cumulative preferreds (NYSE: MHRPD) dropped $5.24, or 54.7%, to $4.34 by mid-morning. The 10.25% series C cumulative preferreds (NYSE: MHRPC) were off $3.045, or 47.3%, at $3.40.

PJT Capital LP is acting as financial advisors. Kirkland & Ellis LLP is acting as legal advisor.

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