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Morning Commentary: Greece, China concerns pressure preferred stocks; MetLife wraps tender offer
By Stephanie N. Rotondo
Phoenix, June 29 – A preferred stock trader said the market was “very quiet” as investors kept an eye on Greece.
Debt talks between the nation and the European Union fell apart over the weekend. Greek prime minister Alexis Tsipras called for a referendum vote on July 5, closed banks for the week and limited cash machine withdrawals as Tuesday’s deadline fast approaches.
Though the talks failed to bring about any deal this weekend, several European leaders, including German chancellor Angela Merkel, indicated that they were still open to negotiations.
Greece has a €1.6 billion payment due to the International Monetary Fund on Tuesday, the same day the terms of its E.U. bailout expire. If the country fails to pay, it will constitute a default and could result in an E.U. exit.
Meanwhile, news out of China was also weighing on the markets, as the country cut interest rates over the weekend in order to outweigh a huge market loss on Friday.
Given the news and its impact on the markets, a trader said he “thought we would have had a bigger sell-off.”
Instead, the markets looked to be taking the news as a “non-event,” though things were certainly weaker on the day.
The Wells Fargo Hybrid and Preferred Securities index was down 17 basis points at mid-morning.
In the secondary, MetLife Inc.’s 6.5% series B noncumulative preferreds (NYSE: METPB) were inching up a penny to $24.99 after the New York-based insurance company said 37.19 million of the shares had been validly tendered.
The company launched the tender June 1, and it expired Friday at midnight ET. Holders that participated in the exchange received par plus accrued dividends.
As for the remaining outstanding shares – just under 23 million of them – those will be called at par, with no accrued dividends, on Wednesday.
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