Morning Commentary: Fed policy meeting eyed; preferred trading muted; Ellsworth lists on NYSE

By Stephanie N. Rotondo

Seattle, Sept. 20 – Trading in the preferred stock market was muted early Wednesday as investors waited to see what the Federal Reserve’s Federal Open Market Committee would say later in the session.

The FOMC began its two-day policy meeting on Tuesday. Come Wednesday afternoon, the committee is expected to announce whether or not it will increase interest rates this month.

Expectations are that rates will stay steady for now, though a rate increase is anticipated for December.

The market will also be looking to see if the Fed plans to start selling off its bond holdings and, if so, just how it intends to do that.

Given the preferred space’s limited trading, the market was generally flat at mid-morning.

Ellsworth Growth and Income Fund Ltd.’s $30 million of 5.25% series A cumulative preferred shares were admitted to the New York Stock Exchange for trading on Wednesday.

The ticker symbol is “ECFPrA.”

In early dealings, the paper was trading at $25.18, up 18 cents.

The deal came Sept. 13. Price talk was 5.25% to 5.375%.

Morgan Stanley & Co. LLC was the bookrunner.

The preferreds also become mandatorily redeemable in certain circumstances.

Proceeds will be used to purchase portfolio securities in accordance with the company’s investment objectives and policies.

Ellsworth is a Morristown, N.J.-based diversified, closed-end management investment company.

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