Given the lousy alternatives for income investors, demand for U.S.-traded preferred stocks remains very high, pushing up the prices of these securities, and issuers are taking full advantage. Upward pressure on prices pushes down the dividend rate (coupon) for new preferred stock issues, allowing issuers to use the proceeds from a new lower-payer to redeem the outstanding shares of an older, higher-payer. We saw several such maneuvers by issuers throughout January.
Specifically, the average market price of U.S.-traded preferred stocks increased by $0.26 per share during January. This price increase pushed down the average current