Preferreds end week in the red; SoCal Energy, Capital One, Digital Realty Trust decline

By Stephanie N. Rotondo

Phoenix, Aug. 21 – Preferred stocks came crashing down with the broader markets Friday amid continued fears of emerging markets and ongoing pressure on crude oil.

The Wells Fargo Hybrid and Preferred Securities index fell 27 basis points. In the straight equity market, the Dow Jones industrial average was down about 530 points.

Concerns about China’s slowing economy grew Friday as new manufacturing data showed the largest contraction in over six years. U.S. benchmark crude oil meantime dropped to sub-$40 per barrel as a report showed U.S. drillers added more rigs into production last week, the fifth week in a row.

Oil prices did recover some ground, however, ending north of $40.

And while preferred stock investors remained zeroed in on recently priced deals. Those too were feeling the pain.

Southern California Edison Co.’s SCE Trust IV’s $325 million of 5.375% fixed-to-floating rate trust preference securities – a deal that priced Monday – were seen drifting lower with the markets.

The preferreds closed down 13 cents at $25.37. The preferreds were off 15 cents at mid-morning, trading at $25.35.

However, Capital One Financial Corp.’s $500 million of 6.2% fixed-rate series F noncumulative preferreds – another deal from Monday – meantime fell 14 cents to $24.80 after being up a penny at $24.95 in mid-morning trading.

Digital Realty Trust Inc.’s $250 million of 6.25% series I cumulative redeemable preferreds were also weakening, declining 30 cents, or 1.2%, to $24.65.

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