Preferreds rise after Treasury auction delay; Fannie Mae, Freddie Mac mixed; Targa dips

By Christine Van Dusen

Atlanta, Oct. 23 – Investors in the preferred stock market were snapping up excess new issues, sending some notes inching higher on Friday after the delay in the two-year Treasury auction.

“They postponed the two-year Treasury auction for two weeks to cause the least disruption, because of the debt ceiling,” a trader said. “Because of that, people are picking up excess issues from other auctions. The long bond [is] down a point, but with our stuff, people are just reaching for the yield.

“Also [with] the comments about whether we'd see a rate hike in December, people are coming into the secondary market and lifting what they think are cheap preferreds.”

Losing some steam were Fannie Mae and Freddie Mac.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were seen Friday at $4.75, up a penny, before closing at $4.77. The 8.25% series T noncumulative preferreds (OTCBB: FNMAT) moved to $6.91, down 4 cents, and then closed at $6.90.

Freddie’s 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were seen Friday at $4.77, down 3 cents, then finished the session at $4.76.

In other trading, Houston-based Targa Resources Partners’ 9% fixed-to-floating rate cumulative redeemable preferred units (NGLS.PA) started out the week at $25.00 to $25.10 and ended it at about $24.95.

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