Preferreds tick higher after Yellen comments; Torchmark notes free up; Gabelli hits par

By Stephanie N. Rotondo

Seattle, March 30 – Preferred stocks continued to be firm in midweek trading on Wednesday, extending the gains seen at the start of the week and furthered by the Federal Reserve chairman on Tuesday.

The Wells Fargo Hybrid and Preferred Securities index closed up 14 basis points, which was down a touch from the mid-morning gain of 17 bps.

On Tuesday, Federal Reserve chairman Janet Yellen said the central bank would exercise caution when opting to raise interest rates in the future, taking into account not only domestic economic data, but global headwinds as well.

A trader said that in the wake of her comments, the likelihood of an April increase went from 11% to 4%. As a result, “people rushed back in” to the markets, pushing them higher.

Of the deals already priced this week, Torchmark Corp.’s $300 million of 6.125% $25-par junior subordinated debentures due 2056 had freed up by mid-morning, according to a trader.

The new notes ended at $25.14, according to a market source, which was off a touch from earlier quotes of $25.15 bid, $25.22 offered.

The deal came upsized from $150 million and tight to the 6.25% price talk.

Meanwhile, the Gabelli Equity Trust Inc.’s $80 million of 5.45% series J cumulative redeemable preferreds – a deal priced Monday and freed Tuesday afternoon – were hanging in a $24.90 to $24.95 range early in the session, only to push up to par by the close.

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