Morning Commentary: Preferred stocks mixed again; Medley pops after add-on prices; calendar eyed

By Stephanie N. Rotondo

Seattle, Feb. 17 – Preferred stocks were mixed in early Friday trading.

The Wells Fargo Hybrid and Preferred Securities index was down 5 basis points at mid-morning, while the U.S. iShares Preferred Stock index was up 13 bps.

At Thursday’s close, the Wells index was the positive one, with iShares trading off.

Medley LLC priced its $30 million add-on to its 7.25% $25-par notes due 2024 (NYSE: MDLQ) late Thursday. The company sold the notes at $25.25 per note, which was in line with revised price talk.

Initial price talk was $25.20 per note.

Come Friday, the paper was seen ticking up 4 cents to $25.20.

“It should pop up here,” a trader opined. “It looks relatively cheap.”

FBR Capital Markets & Co., Incapital LLC, BB&T Capital Markets, William Blair & Co., Compass Point Research & Trading LLC, Ladenburg Thalman & Co. Inc. and JonesTrading ran the books.

As for the coming week, a trader said he was hearing there could be two new deals, down from original chatter of three.

However, the trader noted that those deals could be put on hold, given that president Donald Trump said he was not yet ready to release his much-hyped tax plan during a press conference on Thursday.

“That could put a hold on new issues,” the trader said, as companies, particularly financials, need that information.

Once the plan is released, though, “there should be a flood of new deals.”

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