Morning Commentary: Colony Capital comes in; GE Capital up on sale news; Alabama call expected

By Stephanie N. Rotondo

Phoenix, April 10 – A preferred stock trader said Friday’s session was starting out “pretty quiet.”

“It’s been a quiet week,” he noted.

Colony Capital Inc.’s new $250 million issue of 7.125% series C cumulative redeemable preferreds – a deal priced late Wednesday and freed on Thursday – were slightly off in early trading, as a trader pegged the securities at par bid, $25.07 offered.

The paper went out Thursday at $25.05 bid, $25.08 offered.

General Electric Capital Corp. was in the news early in the day as parent company General Electric Co. said it was selling the banking side of the unit. The effort began with the sale of GE Capital real estate assets for $26.5 billion.

On the news, GE Capital’s 4.875% $25-par notes due 2052 (NYSE: GEB) were moving up 7 cents to $25.4943. The 4.7% $25-par notes due 2053 (NYSE: GEK) were up 11 cents at $25.4399.

Meanwhile, a trader said that Alabama Power Co. should soon be announcing its redemption of three series of preferreds. On Thursday, the company raised $425 million via a sale of two series of straight bonds, the proceeds of which will be going toward funding the redemption.

Looking forward, bank earnings are slated to begin next week. Given that banks have been in their blackout period, new issuance from financials – the largest sector represented in the preferred world – has been nil. But once earnings begin to come out, the pipeline is expected to load up.

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