Preferreds soften in thin holiday trading; Energy Transfer active; financials mixed

By Cristal Cody

Tupelo, Miss., April 18 – Preferred stocks overall remained weak at the market’s opening and stayed soft on Thursday in light holiday trading.

The Wells Fargo Hybrid and Preferred Securities index was down 0.07% mid-morning and ended off 0.12%. The index closed the previous session down 0.11%.

The U.S. iShares Preferred Stock ETF slipped 2 cents, or 0.05% to $36.60 early Thursday and ended down 0.19% to $36.55. The iShares index declined Wednesday 0.22% to $36.62.

In secondary trading, Energy Transfer Operating, LP’s preferred stock was mixed on Thursday following the company’s $700 million sale of $25-par series E fixed-to-floating rate cumulative redeemable perpetual preferred units in the previous session.

The preferred units (Ba2/BB/BB), which priced Wednesday with a 7.6% initial dividend, were quoted down 2 cents, or 0.08%, in over-the-counter trading at the start of the session after opening at $25.05.

The units dropped 15 cents, or 0.6%, to end the day at $24.90.

The Dallas-based natural gas midstream and intrastate transportation and storage company plans to apply to list the units on the New York Stock Exchange under the symbol “ETPPrE”.

Energy Transfer sold 28 million shares of the preferred units, which will reset May 15, 2024 to a floating rate of Libor plus 516.1 basis points.

The company’s existing preferred were modestly better over the day.

Energy Transfer’s 7.625% series D fixed-to-floating rate cumulative redeemable perpetual preferred units (NYSE: ETPPrD) had improved 2 cents, or 0.08%, in early trading on volume of about 20,000 shares but lost ground over the session. The 7.625% preferreds closed up 1 cent, or 0.04%, at $25.31. The preferreds had a trading volume of about 89,000 shares.

At the start of the day, the company’s 7.375% series C fixed-to-floating rate cumulative redeemable perpetual preferred units (NYSE: ETPPrC) rose nearly 3 cents, or 0.11%, to $24.83 on trading volume of about 45,000 shares. The series C preferred stock gained 4 cents, or 0.16%, to close the day at $24.84 on total volume of about 217,000 shares.

Financials mixed

Financial preferred stocks were mixed on Thursday following first-quarter earnings releases by the big banks over the past week.

Morgan Stanley’s preferreds traded mostly weaker during the session and were down about 2 cents to 8 cents, or 0.07% to 0.39%.

JPMorgan Chase & Co.’s 6% series EE non-cumulative preferreds (NYSE: JPMPrC) improved 8 cents, or 0.3%, to head out at $26.66 with about 326,000 shares trading.

Meanwhile, JPMorgan Chase’s 5% series DD non-cumulative preferreds (NYSE: JPMPrD) lost 10 cents, or 0.4%, to close at $26.02 on trading volume of about 190,000 shares.

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