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Monday Morning Kickoff

The S&P500 traded in a range of 4073 to 4177 before closing the week out at 4109, which was down 1.2% from the previous weeks close. It looks like markets will move higher today at the open with futures up by over 1%—whether the gains are held, of course, is a coin toss.

The 10 year treasury moved in a range of 2.83% to 2.99% last week before closing at 2.96%. This was a substantially higher close than the Friday before which was 2.74%. It looks like we will get back above 3.0% this week which we haven’t closed above since May 9th. This week we don’t have economic news to speak of until Friday when we will have the Consumer Price Index (CPI) released—8.2% is expected year over year–most certainly a deviation of more than a couple 1/10th’s above or below will move the markets.

The Fed balance sheet rose by $1 billion last week

After some nice gains the previous week the average $25/share preferred stock and baby bond fell by 9 cents last week. Investment grade issues fell by 16 cents, while mREIT preferreds gained by 14 cents. Banking issues fell 25 cents while shippers rose by 17 cents.

I can’t post the price history chart this week as I am out of the office and my computer I am using doesn’t have the necessary functions to cut and paste the chart–I will update this note when I am back in the office with the new chart.

Last week Pacwest Bancorp sold a 20 million share issue of fixed rate reset preferred. The initial coupon is 7.75% with a reset in 5 years at the 5 year treasury plus a spread of 4.82%.

The pricing term sheet is here.

The issue is trading OTC under ticker PACWL.

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