Market sell-off stalls; Full Circle, Miller lackluster; Principal Financial preferreds gain

By Stephanie N. Rotondo

Phoenix, June 27 - The recent sell-off in the preferred stock market "has ceased for now," a trader said Thursday.

"Liquidity was better, and the market was stronger again," another market source said.

One trader noted that the new issue market continued to be "dead" on Thursday. Recent small deals from Full Circle Capital Corp. and Miller Energy Resources Inc. weren't seeing much play.

"I know there are some buyers lined up below par" for Full Circle's new $18.75 million of 8.25% $25-par notes due 2020. "But there aren't any offers."

The deal came on Tuesday.

Miller Energy priced an $8.73 million add-on to its 10.75% series C cumulative redeemable preferreds early on Thursday.

"I don't think anyone really cared," a trader said.

The shares were sold at a discounted price of $21.50. By midday, the listed preferreds (NYSE: MILLPC) were down 53 cents, or 2.46%, at $21.00.

The issue had hit a low of $20.10 early in the session. At the close, the preferreds were at $20.68, off 85 cents, or 3.95%.

"That's got to be one of the yieldiest things out there," a source remarked.

As for the secondary market, it was seeing a "nice rebound," according to a trader.

Principal Financial Group Inc. preferreds were active and higher in Thursday trading. The company announced that it had reached an agreement with Bofl Federal Bank to transfer some deposits to Bofl.

Principal busy, better

Principal Financial Group's floating-rate series A $100-par preferreds (OTCBB: PFGZP) were "trading a bunch," a trader said at midday, continuing a trend that began on Wednesday.

The preferreds were up $3.95, or 4.26%, at midday, trading at $96.90. The issue closed at $97.50, up $4.85, or 5.23%.

However, one source noted that the paper had seen an "unusually low" trade on Wednesday and that Thursday's closing price was "more of their traditional price."

The 6.518% series B noncumulative preferreds (NYSE: PFGPB) meantime gained 29 cents, or 1.15%, ending at $25.76.

On Thursday, the Des Moines, Iowa-based insurance and investment management company said it had reached a deal with Bofl Federal Bank in which Principal would transfer some of its individual checking accounts and non-IRA savings, money market and CD accounts to Bofl.

Principal is currently transforming itself from a bank holding company into a limited-purpose trust institution.

"That helps them get closer to getting rid of the bank holding status," a market source said.

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