Midday Commentary: Trading activity muted going into end of month, quarter; CBL upsizes

By Stephanie N. Rotondo

Phoenix, Sept. 28 - The preferred stock market was taking "a breather" as the end of the month and quarter came, a trader said Friday.

"I think people are positioned the way they want," he said, resulting in little activity. On top of that there are more concerns about what is happening in Europe, especially Spain.

The struggling nation said Friday that an independent audit of its banks showed a $76.3 billion shortfall under a stress test.

Also, the recent onslaught of new issues was tempering demand.

"Retail appetite might not be as strong," a trader remarked.

New and recent issues continued to be the focus.

CBL & Associates Properties Inc. priced $150 million of 6.625% series E cumulative redeemable preferreds early in the session.

Price talk was 6.625% to 6.75%, according to the trader. The minimum issue size was expected to be $100 million.

The trader said he had not seen any markets in the new deal.

"It's just dead," he said.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the joint bookrunning managers.

Chattanooga, Tenn.-based CBL will apply to list the preferred stock on the New York Stock Exchange under the ticker symbol "CBLPE."

Proceeds will be used to redeem the company's series C preferreds and for general corporate purposes.

Meanwhile, both DTE Energy Co.'s new $200 million of 5.25% $25-par 2012 series C junior subordinated debentures due 2062 and Gabelli Equity Trust Inc.'s $105 million of 5% series H cumulative preferreds - issues that priced on Tuesday - continued to rise.

A trader saw the DTE notes at $25.30 and Gabelli's between $25.20 and $25.30.

AG Mortgage Investment Trust Inc.'s recent 8% series B cumulative redeemable preferreds were admitted to the NYSE Friday. The $100 million deal priced Sept. 20.

The preferreds were up 3 cents by midday, trading at $24.95.

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