Holiday slowdown in full swing; Discover Financial preferreds drift down after earnings

By Stephanie N. Rotondo

Phoenix, Dec. 20 - The preferred stock market is winding down for the year, a trader said Thursday.

"A lot of shops are already closed for the year," he said. "There's not a lot of people around; it's very quiet."

Those empty desks might be why the market hasn't seen a major sell-off, as Republican lawmakers are set to vote on a fiscal cliff deal that is likely to be vetoed by the president.

Still, that veto could give an idea of what direction the talks are going, the trader said.

"They'll probably raise taxes either way," he said.

Another market source said volume was in a "slow, steady decline" as the holidays neared, but the market was holding its ground.

Of the day's dealings, Discover Financial Services Inc. was a busy one, following the release of quarterly earnings. A source noted that the numbers were "disappointing," resulting in a moderate sell-off of the preferreds.

Discover falls post-earnings

Discover Financial reported its fourth-quarter results on Thursday, showing an increase in profit and a decline in unpaid balance write-offs.

Still, the numbers missed expectations and the company's preferreds slipped in trading.

The 6.5% series B noncumulative perpetual preferreds (NYSE: DFSPB) fell 8 cents to $25.13.

For the quarter ended Nov. 30, Discover reported net income of $541 million, or $1.07 per share. For the same quarter of 2011, the company had posted a profit of $513 million, or 95 cents per share.

Revenues jumped 11% to $2 billion, after interest expenses.

Analysts had estimated a profit of $1.12 per share on revenues of $1.96 billion.

Total loans, credit card loans and card sales improved 6% and payment delinquencies fell to 1.86%.

Total charge-offs was 2.29%, an historic low.

Recent deals holding in

In recent deals, Stifel Financial Corp.'s $150 million sale of 5.375% $25-par senior notes due 2022 were pegged at $24.90 bid, $24.92 offered early in the session but moved up to $24.93 bid by midday, according to a trader.

SunTrust Banks Inc.'s $450 million of 5.875% series E noncumulative perpetual preferreds were meantime languishing at $24.65 bid, $24.75 offered.

Stifel priced Tuesday before the market closed. SunTrust priced last week.

New deals to list

Retail Properties of America Inc.'s $125 million of 7% series A cumulative redeemable preferreds - an issue that priced Dec. 11 - is expected to list on the New York Stock Exchange on Friday.

The ticker symbol is "RIOM." The paper was quoted at $24.90 bid, $25.10 offered.

Seaspan Corp.'s $67.5 million of 7.95% series D cumulative redeemable perpetual preferreds - which came Dec. 6 - will also list on Friday, under the symbol "SSWPD."

That issue closed at $24.90 bid, $25.10 offered.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.