Preferred stocks rebound; Gladstone frees to trade; Costamare slips; Morgan Stanley active

By Stephanie N. Rotondo

Phoenix, May 8 – The preferred stock market ended the week with a stronger tone following a jobs number that was “not disappointing,” a trader said Friday.

The Wells Fargo Hybrid and Preferred Securities index closed 68 basis points better. The index was up 61 bps at mid-morning.

New data showed nonfarm payrolls increasing by 223,000 in April. Though that was less than the 224,000 additions Reuters had estimated, the market appeared pleased with the figure.

Additionally, unemployment fell to 5.4% from 5.5%, pushing that market indicator closer to a level the Federal Reserve considers full employment.

The fresh data was seen as just good enough to be positive, but not so good that an interest rate hike form the Federal Reserve seemed imminent.

On the heels of the positive jobs data, “we’re seeing a run back into high yield,” a trader said. With the long bond also pushing higher, “everything is going to be popping up here the rest of the day.”

Among new issues, a trader said Gladstone Investment Corp.’s $35 million of 6.5% series C cumulative term preferreds due 2022 had freed from the syndicate.

He quoted the issue at $24.75 bid, par offered.

The issue priced Wednesday, coming upsized from $25 million.

Janney Montgomery Scott LLC was the bookrunner. Co-lead managers included J.J.B. Hilliard, W.L. Lyons, LLC, Wunderlich Securities, William Blair & Co. and Ladenburg Thalmann.

Meanwhile, Costamare Inc.’s $100 million of 8.75% series D cumulative redeemable preferreds – another deal from Wednesday – were seen at $24.65 bid, $24.72 offered.

Another source placed the issue at $24.65, down 10 cents from the previous close.

The issue was assigned a temporary reporting symbol of “COZTF.”

Morgan Stanley & Co. LLC, UBS Securities LLC, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Stifel Nicolaus & Co. Inc. facilitated that deal.

Morgan Stanley mixed

Morgan Stanley & Co. Inc.’s recently called issues – the 6.6% capital VII and VI securities – remained active in Friday trading, though the shares finished the session mixed.

The capital VII (NYSE: MSZ) securities ended a penny higher at $25.11. The capital VI (NYSE: MSJ) securities slipped a similar amount to $25.09.

New York-based Morgan Stanley announced the $1.6 billion redemption on April 27. The capital VII preferreds will be taken out Tuesday and the capital VI’s on May 27.

The redemption price is par plus accrued dividends.

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