Markets react to Gross’ Pimco departure, GDP data; Qwest’s new notes fall; Gabelli lists

By Stephanie N. Rotondo

Phoenix, Sept. 26 – The markets were getting shook up Friday as it was announced that Pimco’s Bill Gross was leaving for Janus Capital Group, effective Monday.

“Pimco funds were getting annihilated with [Gross] leaving,” a preferred stock trader said.

Still, the preferred market was holding up relatively well, as the Wells Fargo Hybrid and Preferred Securities index finished up 13 basis points. The market started soft but started climbing up steadily in mid-afternoon.

“It seemed to be pulled by strength in the high-yield and equity markets,” a market source said.

The broader markets were also feeling more positive, spurred by new GDP data that indicated the U.S. economy grew at its fastest pace in two years.

Qwest Corp.’s $500 million issue of 6.875% $25-par senior notes due 2054, for instance, were trading all the way down to $24.35, according to the trader.

The Monroe, La.-based telecommunications company has two 7% issues coming due in 2052, one in April and one in July. Both are trading above par.

The new issue priced Monday.

Meanwhile, the Gabelli Healthcare & WellnessRx Trust’s $35 million of 5.875% series B cumulative perpetual preferred shares began trading on the New York Stock Exchange on Friday, as was expected.

The deal priced Sept. 17. The ticker symbol is “GRXPB.”

The preferreds were trading at $24.91 at mid-morning, down from opening levels of par. But the issue climbed back up to end unchanged at par.

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