Southern California Edison, Compass Diversified free to trade; Validus trades higher

By Colin Hanner

Chicago, June 20 – The preferred stock space was more active than past sessions, a market source said, with two new issues freeing to trade.

“It’s a little busier, it’s picking up, but it’s not what you would call a busy day,” the market source said on Tuesday.

The Wells Fargo Hybrid and Preferred Securities index was up 3 basis points, a 5 bps upswing since mid-morning. The U.S. iShares Preferred Stock ETF was off 8 bps, unchanged since mid-morning.

In the new deal space, Southern California Edison Co.’s SCE Trust VI’s $475 million offering of 5% series L trust preference shares, a deal which came to market on Monday and was upsized from $200 million, was free to trade, a market source said.

The shares closed at $24.99. More than 3.25 million shares traded.

The company plans to use the proceeds of the notes to redeem some or all of its 5.625% series F trust preference shares (NYSE: SCEPrF).

Those preferreds were down 5 cents, or 0.20%, to $25.14.

Compass Diversified Holdings LLC’s $100 million of 7.25% series A preferreds, which the company debuted in the preferred space on Monday, also freed and finished the day at $24.67 with more than 1.125 million shares traded, a market source said.

Validus Holdings Ltd.’s $250 million of 5.8% series B noncumulative preference shares, trading under temporary ticker symbol “VRRHP” since it came to market on June 13, was up 15 cents, or 0.60%, to $25.15 with more than 400,000 shares traded.

In the secondary space, NuStar Energy LP’s 7.625% series B fixed-to-floating rate cumulative redeemable preferred units (NYSE: NSPrB) trailed with more than 325,000 shares traded.

The preferreds were down 18 cents, or 0.71%, to $25.11.

Recently listed Maiden Holdings Ltd.’s $150 million of 6.7% series D noncumulative preference shares (NYSE: MHPrD), which began trading on the New York Stock Exchange on Monday, were down 1 cent, or 0.04%, to $25.27.

Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were flat at $6.45 and traded more than 300,000 times.

As for the week ahead, a market source said that the Federal Reserve’s big-bank stress test results, set to come out on Thursday, will draw a lot of attention though does not “expect anything dramatic to come out of it.”

The results, announced Thursday at 4:30 p.m. ET, may shape the current conversation surrounding strengths and weaknesses of Dodd-Frank Act-imposed regulations.

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