Morning Commentary: Primary quiets down for the week; oil-linked issues trade off with crude prices

By Stephanie N. Rotondo

Seattle, April 20 – The primary preferred stock market was quiet again on Wednesday, as a trader said he was “told there would be no more deals this week.”

“Maybe next week,” he said.

And while the preferred space was generally firm – the Wells Fargo Hybrid and Preferred Securities index was up 7 basis points at mid-morning – the trader noted that “a lot of people are heading to New York for that syndicate party. So there’s not a lot going on.”

On Thursday, the Women’s Syndicate Association will hold its annual spring luncheon in New York.

As for deals from earlier in the week, Bank of America Corp.’s $900 million of 6% series EE noncumulative perpetual preferreds were seen in a $25.15 to $25.20 context.

The deal price Monday, coming in line with revised talk and upsized from $250 million. The issue freed to trade early Tuesday.

BofA Merrill Lynch ran the books.

Meanwhile, another decline in crude oil was pushing down energy-linked preferreds.

Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) was trading off 12 cents, or 4.71%, to $2.43 in early trades. The issue – and several other oil and gas issues – was among the day’s biggest percentage losers.

Vanguard Natural Resources LLC’s 7.625% series B cumulative redeemable preferred units (Nasdaq: VNRBP) were then seen dropping nearly 13 cents, or 4.17%, to $2.9613. Legacy Reserves LP’s 8% series A fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYP) were down 15 cents, or 3.82%, at $3.78.

Domestic crude was off 1.77% at mid-morning, even as an oil worker strike in Kuwait came to an end. The nation already had tanker ships lining up to cart away its goods and production was increased to 1.6 million barrels a day from 1.1 million barrels pumped on Sunday.

But late Tuesday, the American Petroleum Institute released its latest inventory report, which showed a larger-than-expected build for the week. Investors were therefore concerned as to what the Energy Information Administration’s data – set to be released Wednesday morning – would show.

© 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.