Midday Commentary: Affiliated Managers Group, NorthStar to price deals; GE Capital trades actively

By Stephanie N. Rotondo

Phoenix, Oct. 3 - There was no letting up in the new issue preferred market on Wednesday.

Two more deals got added to the calendar during the session, a $25-par notes offering from Affiliated Managers Group Inc. and a straight preferred sale from NorthStar Realty Finance Corp.

Affiliated Managers Group is talking its 10-year notes around 5.25%.

"It's looking OK," a trader said, seeing a $24.70 bid for paper in the gray market at midday. "I like the structure of it. That thing should hang in there pretty well."

NorthStar's proposed $50 million offering of series C cumulative redeemable perpetual preferreds was also at $24.70 bid in the gray market, though there were few markets flying around.

Among recently priced deals, a trader saw General Electric Capital Corp.'s $825 million of 4.875% $25-par senior notes due 2052 at $24.70 bid, $24.75 offered. The deal priced late Tuesday.

"There's a decent amount of action in it," he said, noting that it is a "highly rated name."

The trader also remarked how the notes had "pulled back as soon as they adjusted the price talk below 5%" ahead of pricing on Tuesday.

Meanwhile, Apollo Investment Corp.'s $150 million of 6.625% $25-par senior notes due 2042 freed to trade, a trader said. That deal came Monday.

The issue was not performing as well as some other recent deals, the trader noted. He pegged the securities at $24.40 bid, $24.50 offered.

"Considering the coupon and the rating, it seems a little soft," he said. "I'm kind of surprised."

He further opined that perhaps the weakness was due to oversupply in the market.

Wednesday also saw three recent deals hitting the New York Stock Exchange.

Gabelli Equity Trust Inc.'s new 5% series H cumulative preferreds were admitted under the ticker symbol "GABPH." The issue came Sept 25.

Also from Sept. 25, DTE Energy Co.'s 5.25% $25-par 2012 series C junior subordinated debentures due 2062 listed under the ticker symbol "DTQ."

And Resource Capital Corp.'s 8.25% series B cumulative redeemable preferreds, which also priced Sept. 25, hit the NYSE under the ticker symbol "RSOPB."

Gabelli's preferreds were up 16 cents by midafternoon, trading at $25.33. DTE's notes were at $25.20, versus opening levels of $25.28. Resource Capital's paper meantime dipped a cent to $24.84.

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