Midday Commentary: STAG Industrial, MFA Financial rise; Fannie, Freddie boosted by budget

By Stephanie N. Rotondo

Phoenix, April 10 - There were no new preferred stock issues announced on Wednesday, which a trader said was due to a combination of things.

Firstly, the Federal Reserve released minutes from its last meeting, which "suggested they are going to continue buying assets to keep rates at these levels." Issuers were likely waiting for the release before putting out a new deal.

The trader also noted that the "big women's syndicate meeting" was getting ready to start in New York. The Women's Syndicate Association's Annual Cocktail Reception is scheduled for April 18, according to the group's website.

And, with many financials getting ready to report earnings at the end of this week, "we probably won't see any new deals [from banks] until after that."

As for the week's new deals, STAG Industrial Inc.'s $62.5 million of 6.625% series B cumulative redeemable preferreds - a deal that priced Tuesday - was quoted at $24.85 bid, par offered.

"I haven't seen it free yet," a trader said.

MFA Financial Inc.'s newly priced $175 million issue of 7.5% series B cumulative redeemable preferreds, however, did free up late Tuesday, according to a trader.

The trader pegged that paper at $24.80.

In the secondary, a trader remarked that a new budget unveiled by president Barack Obama on Wednesday indicated that income from Freddie Mac and Fannie Mae could be as high as $51 billion. That fueled speculation that the agencies might be kept around as a "cash cow," he said.

The agencies' preferreds were all up about 20 cents as a result, he said.

And, First BanCorp of Puerto Rico announced it had scrapped a common stock-for-preferred stock exchange of five series of noncumulative preferreds on Wednesday. The bank said the cancelled swap was due to a failure to win investor approval for the deal.

On that news, the preferreds in question were mostly softer. The 7% series E noncumulative perpetual monthly income preferreds (OTCBB: FBPRL) were down the most at midday, losing $1.30, or 6.02%, to trade at $20.30.

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