Oil prices slide, weigh on energy sector; Triangle Capital preferreds upsized; Ally active

By Stephanie N. Rotondo

Phoenix, Feb. 4 – Preferred stocks were reversing direction Wednesday, and the Wells Fargo Hybrid and Preferred Securities index dropped 14 basis points.

The decline came as oil prices stemmed a recent rally and the European Central Bank cut off funding for Greece.

As to the latter issue, the ECB said its decision was based on concerns the government would not make good on its pledges.

In oil, West Texas Intermediate crude erased all of the previous day’s gains, falling $4.15, or 7.82%, to $48.90 a barrel. Brent crude lost $3.14, or 5.42%, ending at $54.77.

With the dip in oil prices, energy preferreds were also weakening. A trader noted that Seeking Alpha had published some articles on Breitburn Energy Partners LP and Vanguard Natural Resources LLC that said those companies’ bonds were “ridiculousy cheap to the preferreds.”

In the primary, Triangle Capital Corp. brought $75 million of 6.375% $25-par notes due 2022.

The deal was originally slated to be $50 million, talked at 6.375% to 6.5%.

Keefe Bruyette & Woods Inc., Raymond James & Associates Inc., BB&T Capital Markets and Janney Montgomery Scott LLC were the joint bookrunners.

Ally Financial Inc.’s 8.125% series 2 fixed-to-floating rate trust preferred securities (NYSE: ALLYPA) continued to be actively traded following news out late Monday regarding the departure of Michael A Carpenter, the company’s chief executive officer.

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