Aegon doing well; Ally steady on quarterly loss; Deutsche Bank gains despite poor numbers

By Stephanie N. Rotondo

Portland, Ore., Feb. 2 - Preferred stocks were up modestly in Thursday trading on light to moderate volume, market sources reported.

"New issues are slowly creeping up," one trader said. Aegon NV's 8% $25-par notes were firming, and some of its existing issues were active, if not much changed.

Ally Financial Inc.'s preferreds "held in" after the company released its fourth-quarter results. However, volume was unusually light for the typically active name.

In other earnings news, Deutsche Bank AG's paper was inching upward despite reporting "horrendous" numbers, a source remarked.

Meanwhile, Royal Bank of Scotland Group plc paper remained active, though the structure ended the day mixed.

Aegon doing well

Aegon's 8% $25-par notes have yet to list on an exchange, but the securities have been trading in decent size recently.

On Thursday, a market source said about 714,000 of the notes changed hands - more than the top-trading name in the secondary market away from recent issues.

The source saw the issue closing at par with a volume-weighted average price of $24.90.

"There were very few trades below par," he said.

Another trader quoted the issue at $24.85 bid, $24.90 offered.

Among Aegon's listed securities, the 6.375% perpetual capital securities (NYSE: AEH) were among the most actively traded issues of the day. Nearly 565,000 of them turned over, and the issue ended flat at $21.85.

There was no fresh news out on the Hague, the Netherlands-based insurance and financial services provider.

Ally holds on

A trader said Ally Financial's two series of preferreds "held in" despite the company reporting a $250 million loss for the fourth quarter.

The 8.125% fixed-to-floating series A preferreds (NYSE: ALLYPB) fell just a cent to $21.15, and the 8.5% trust preferreds (NYSE: ALLYPA) lost a nickel, finishing at $22.41.

Volume in both issues was muted, however.

Ally's swing to a loss was due to charges resulting from regulatory penalties tied to foreclosure issues from its Residential Capital LLC mortgage-lending unit.

"It's hard to make a judgment on their financials," a trader said, noting that Ally's auto-lending unit was doing well and "their tier 1 capital still looks good."

"The question is will ResCap become a bottomless pit?" he said.

He added that during the company's question-and-answer period of its quarterly conference call, management was quick to say that bankruptcy was still on the table for the unit.

But, "it is a similar argument that Bank of America made on Countrywide," he said. Bank of America was forced to put Countrywide into bankruptcy due to its mortgage lending issues, but there were some who questioned the legality of it - and whether or not the parent company should still be on the hook for any liabilities.

Ally is a Detroit-based bank.

Deutsche rises despite numbers

Deutsche Bank preferreds were rising modestly despite the bank's "horrendous" earnings, a market source said.

The 7.6% trust preferreds (NYSE: DTK) made the day's most active list, with almost 540,000 preferreds changing hands. They rose 7 cents to $24.97.

The 6.5% 2011 series I junior subordinated debentures due 2061 (NYSE: DTZ) gained the most on a percentage basis, improving 27 cents, or 1%, to $27.30.

The German bank reported net income of about $194 million, a 76% decline year over year. The lower figures were based in part on losses tied to its investment-banking unit and sovereign-debt declines.

RBS remains active

The Royal Bank of Scotland preferred complex continued to generate investor interest on Thursday, though the paper ended mixed on the day.

The 6.08% noncumulative guaranteed trust preferreds (NYSE: RBSPG) inched up a cent to $13.87, while the 5.9% noncumulative guaranteed trust preferreds (NYSE: RBSPE) fell a cent to $13.85.

The Edinburgh-based bank's preferreds have been on the active side of late. Market players have speculated that potential returns on the paper could be significant if dividends on certain issues are turned back on in the next 12 to 18 months.

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