American Homes, TriplePoint list on NYSE; Two Harbors above par again; GSEs strengthen

By Stephanie N. Rotondo

Seattle, July 19 – The preferred stock market managed to hold on to the gains incurred in the previous session come midweek trading, albeit just barely.

The Wells Fargo Hybrid and Preferred Securities index closed up 1 basis point, though it was up 12 bps at mid-morning. The U.S. iShares Preferred Stock ETF ended up 10 bps, after being up 15 bps earlier in the day.

Recent issues were hitting the New York Stock Exchange on Wednesday, including American Homes 4 Rent’s $115 million of 5.875% series G cumulative redeemable preferreds and TriplePoint Venture Growth BDC Corp.’s $65 million of 5.75% $25-par notes due 2022.

The former listed under the ticker “AMHPrG,” while the latter was admitted under the symbol “TPVY.”

American Homes was trading up 13 cents upon listing, trading at $25.18. TriplePoint was also better, adding 63 cents, or 2.56%, to trade at $25.25.

American Homes priced July 10. TriplePoint came July 11.

As for Two Harbors Investment Corp.’s $250 million of 7.625% series B fixed-to-floating rate cumulative redeemable preferreds – a deal from July 12 that has not yet listed – it was up 47 cents, or 1.88%, at $25.41.

The issue had fallen below par on Tuesday, though a market source deemed the level inaccurate, given that it was a smaller trade.

Away from the recent issues, Fannie Mae and Freddie Mac preferreds were busy and better.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) firmed 15 cents, or 2.45%, to $6.28. The 8.25% series T noncumulative preferreds (OTCBB: FNMAT) gained 17.5 cents, or 2.94%, to close at $6.125.

Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) meantime rose 13 cents, or 2.27%, to $5.85.

One market source said there was no fresh news to cause the surge.

“The last major news was the House’s budget proposal, which would privatize the GSEs,” he said. “But that was known by Tuesday morning.”

Morgan Stanley firms

Morgan Stanley & Co. Inc.’s 5.85% series K fixed-to-floating rate noncumulative preferreds (NYSE: MSPrK) were trading actively on Wednesday, following the release of the company’s second-quarter earnings.

The preferreds were modestly better, adding a penny to finish the session at $27.22.

For the quarter, the New York-based investment bank posted a profit of $1.6 billion, or 87 cents per share. That compared to a profit of $1.4 billion, or 75 cents a share, the year before.

Analysts polled by Thomson Reuters had forecast EPS of 76 cents.

Total revenue increased 7% to $9.5 billion. Analysts had estimated revenue of $9.1 billion.

Revenue from fixed-income trading fell 4% to $1.3 billion. The decline in that area was better than that of its rivals, particularly Goldman Sachs.

For its part, Goldman’s fixed-income trading revenue dropped 40%.

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