Investors return from holiday weekend to find new Alabama Power deal; Fannie, Freddie soften

By Stephanie N. Rotondo

Seattle, Sept. 5 – As market players began to return from a long holiday weekend, the preferred stock market offered up a new deal to get things moving on Tuesday.

Alabama Power Co. brought a $250 million offering of 5% class A cumulative preferred stock to market.

The issue priced tighter than the 5.125% price talk.

Additionally, as pricing occurred prior to the market’s close, the issue had already freed to trade, according to a market source.

The temporary ticker is “ABBLP.”

At the bell, the issue was seen at $24.97. Shortly after pricing, however, a trader had quoted the paper at $25.02 bid, $25.08 offered.

That compared to $24.75 bid, $24.90 offered in the early gray market.

BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are running the books.

Away from Alabama Power, Fannie Mae and Freddie Mac’s preferreds were in retreat on chatter that housing finance reform would be taking a backseat to other issues now that Congress is back in session.

Fannie’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) slipped 4 cents to $6.46. Freddie’s 8.375% fixed-to-floating rate noncumulative preferreds (OTCBB: FMCKJ) lost a dime, or 1.59%, to close at $6.20.

Despite promises that housing and GSE reform would be done by the end of the year, market commentators are now suggesting that it will once again be pushed out.

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