Morning Commentary: Preferreds start week with gains; PG&E mixed in early trading

By Abigail W. Adams

Portland, Me., Feb. 26 – The preferreds market was off to a positive start on Monday with both the Wells Fargo Hybrid & Preferred Securities Financial index and the U.S. iShares Preferred Stock ETF up in early trading.

The Wells Fargo Hybrid & Preferred Securities Financial index was up 0.24%. The U.S. iShares Preferred Stock ETF was up 0.27%. Both market indicators saw a straight week of gains last week after seeing losses for most of February.

Last week ended with the pricing of a new deal. 1347 Property Insurance Holdings Inc. priced a downsized offering of $16 million, or 640,000 shares, of 8% series A perpetual cumulative preferred stock at $25.00 per share after the market close Feb. 23.

The new offering has not yet freed for trade in over the counter markets. The preferred stock will be listed on Nasdaq under the ticker “PIHPP.”

PG&E Corp. and Pacific Gas & Electric Co. preferreds were mixed in early trading on Monday with some seeing dramatic gains in scattered trades. PG&E’s 4.8% redeemable preferreds were up $1.00, or 4.72%, to $22.20 in low-volume trading.

Pacific Gas & Electric’s 4.5% redeemable preferred stock was up 49 cents, or 2.45%, to $20.50 in early trading.

Pacific Gas & Electric’s 6% non-redeemable preferred stock was down 15 cents, or 0.55%, to $27.35.

Pacific Gas & Electric’s 5% nonredeemable preferred stock was up 11 cents, or 0.48%, to $22.99.

Pacific Gas & Electric’s 5% series A redeemable preferred stock was down 7 cents, or 0.31%, to $22.23.

Pacific Gas & Electric’s 5.5% nonredeemable preferred stock was up 29 cents, or 1.18%, to $24.94.

As previously reported, S&P lowered its long-term ratings on PG&E and Pacific Gas & Electric on Feb. 22, including the issuer credit ratings to BBB+ from A-, as a result of the fourth-quarter and year-end earnings report.

“In the year-end earnings release and communications, PG&E management was not able to clarify when and whether the suspended stock dividends will be resumed and did not offer any new or better information on the potential wildfire exposure amount that would prompt continued suspension,” the agency said in a news release.

PG&E suspended the quarterly cash dividend on the company’s common stock for the fourth quarter and subsidiary Pacific Gas & Electric suspended the dividend on the preferred stock beginning in the three-month period ending Jan. 31, 2018, as a result of uncertainty surrounding the causes and potential liabilities associated with the 2017 California wildfires.

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