Morning Commentary: Preferreds improve in wake of jobs number; National General lists on Nasdaq

By Stephanie N. Rotondo

Seattle, July 8 – The preferred stock market was jumping early Friday, as the latest U.S. jobs report came out better than expected.

“The jobs number was out of the water,” a trader said.

Non-farm payrolls increased by 287,000 in June, higher than the 180,000-job increase expected.

The gain was the biggest seen in eight months.

In response, the Wells Fargo Hybrid and Preferred Securities index popped 27 basis points by mid-morning.

Ashford Hospitality Trust Inc.’s $120 million of 7.375% series F cumulative preferreds – a deal priced Wednesday and freed to trade on Thursday – was also ticking higher, as a trader pegged the issue at $25.06 bid, $25.16 offered.

Among other recent deals, National General Holdings Corp.’s $200 million of 7.5% series C noncumulative preferred stock began trading on the Nasdaq Global Select Market on Friday, according to a market source.

The ticker is “NGHCN.”

A trader said there was “decent volume” in the issue, which he placed at $25.36.

The company sold $175 million of the preferreds on June 29. A $25 million greenshoe was exercised July 5, bringing the total outstanding to $200 million.

Price talk was 7.625%. The preferreds were issued as depositary shares representing a 1/40th interest.

Morgan Stanley & Co. LLC, UBS Securities LLC and Keefe Bruyette & Woods Inc. were the joint bookrunners. RBC Capital Markets and JMP Securities were the co-managers.

Looking ahead, a trader said he was “hearing of a few new deals next week,” though he did not have any specific names.

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