Citigroup, American Realty see 'robust' volumes; investors await sale of CHS preferreds

By Christine Van Dusen

Atlanta, Feb. 18 - The preferred stock market was up about 8.5 cents on a Tuesday that started quietly and slowly and ended with heavy activity for a few key issues.

"The volume was concentrated in a limited number of names," a market source said. "For them it was pretty robust."

In the morning, though, investors weren't as active, given the post-holiday malaise and the continuation of wintry weather in the Northeast.

"We're getting hit with snow again," a Chicago-based trader said. "We just got through some yesterday. And we're coming off a holiday, so there's a little lag here."

BRE Properties Inc.'s 6.75% series D cumulative redeemable preferred stock was quoted at $25.31, up 9 cents on volume totaling 27,892.

Deutsche Bank Contingent Capital Trust II's 7.6% trust preferred securities traded at $26.22, up 9 cents on 25,206 shares traded.

And Wells Fargo & Co.'s 8% non-cumulative perpetual preferred stock, series J, was seen at $28.82, up 5 cents on 22,986 in total volume.

By the afternoon, activity picked up significantly, and Citigroup Inc.'s preferred securities, series K, traded up at $25.76, up 21 cents on 1.51 million shares traded.

American Realty Capital Properties Inc.'s preferreds headed into day's end up 30 cents at $22.16 on volume totaling 904,811.

"For others, it was so-so," the market source said.

The primary market was quiet, with investors keeping an eye on CHS Inc. Last week the Minnesota-based agricultural company announced plans to offer up to $250 million series 2, class B cumulative redeemable preferreds.

BofA Merrill Lynch and Wells Fargo Securities LLC are leading the new deal.

"We're waiting to see when CHS brings the deal," a trader said on Tuesday. "Nobody seems to know much about it, so we're in wait-and-see on that."

On Tuesday, the company's existing 7.875% series 1, class B cumulative redeemable preferreds (Nasdaq: CHSCO) were trading at $27.71, down 51 cents.

"I would love to see some new deals," the trader said.

The CHS deal should come to the market "in the not too distant future," a market source said. "They wouldn't have filed otherwise."

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