Morning Commentary: Pebblebrook, Ares get temporary tickers; Reinsurance Group trades at a premium

By Stephanie N. Rotondo

Seattle, June 3 – Recently priced preferred stock issues were “jumping up,” a trader said, following a weak jobs report.

In its monthly report, the Labor Department said that nonfarm payrolls improved by only 38,000 jobs last month, marking the lowest increase in six years. The report also downwardly revised March and April figures by 59,000 jobs.

The unemployment rate dipped to 4.7%, though that was attributed to people discontinuing their job search.

As for new issues, Pebblebrook Hotel Trust’s $125 million of 6.375% series D cumulative redeemable preferreds – a deal priced Thursday – had freed to trade by mid-morning and was already assigned a temporary trading symbol.

The symbol is “PBBKP,” a trader said.

He pegged the issue at $24.90 in early trading.

From Wednesday’s business, Ares Management LP’s $275 million of 7% series A preferred units were also trading under a temporary symbol, “ARMGP.”

The units were pegged at $24.70.

Also priced Wednesday, Reinsurance Group of America Inc.’s $400 million of 5.75% $25-par fixed-to-floating rate subordinate debentures due 2056 were seen trading “above $26,” according to a trader.

And from Tuesday, NextEra Energy Capital Holdings Inc.’s $500 million of 5.25% series K junior subordinated debentures due 2076 were quoted at $24.90 bid, $24.95 offered.

Away from recent deals, Colony Capital Inc. and NorthStar Realty Finance Corp. preferreds were ticking higher after it was announced late Thursday that the entities – along with NorthStar Asset Management Group Inc. – would merge in an all-stock deal.

Colony’s 7.125% series C cumulative redeemable perpetual preferreds (NYSE: CLNYPC) were up 39 cents, or 1.48%, at mid-morning, trading at $23.94. NorthStar Realty’s 8.25% series B cumulative redeemable preferreds (NYSE: NRFPB) were up 66 cents, or 2.73%, at $24.84. The 8.75% series E cumulative redeemable preferreds (NYSE: NRFPE) had gained 67 cents, or 2.72%, to $25.77.

“That’s interesting that the real estate investment trusts are going to start merging,” a trader said.

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