Preferred stocks soft amid growing geopolitical concerns; GSEs rebound; Scorpio lists

By Stephanie N. Rotondo

Seattle, April 11 – The preferred stock market was giving up some gains in Tuesday trading.

Preferreds were following the broader markets lower, as geopolitical concerns – specifically in regards to the Middle East and the Korean Peninsula – had investors looking to safer investments.

The Wells Fargo Hybrid and Preferred Securities index traded down 10 basis points. The U.S. iShares Preferred Stock ETF finished 15 bps lower, though it was off 28 bps at mid-morning.

Fannie Mae and Freddie Mac dominated the trading space and even managed to end with a firm tone, despite the day’s overall weakness.

A market source noted that he had not seen anything new to cause the volume surge or the course reversal.

Fannie’s variable rate series O noncumulative preferreds (OTCBB: FNMFN) put on $1.00, or 10%, closing at $11.00, while the 8.25% series T noncumulative preferreds (OTCBB: FNMAT) were up 75 cents, or 13.51%, at $6.30.

And, the 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) rose 47 cents, or 8.33%, to $6.11.

In Freddie paper, the 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) improved 34 cents, or 6.33%, to $5.71.

Among recently priced issues, Scorpio Tankers Inc.’s 8.25% $25-par senior notes due 2019 – a $50 million issue priced on March 28 – were admitted to the New York Stock Exchange on Tuesday.

The ticker symbol is “SBBC.”

The notes closed the day at $25.27, which compared to par at the open.

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