Fannie Mae, Freddie Mac preferreds tumble; NEAH GES to issue preferreds; Aegon dips

By Christine Van Dusen

Atlanta, Oct. 1 – Preferred stock from Fannie Mae and Freddie Mac plummeted on Wednesday after a federal judge dismissed lawsuits that alleged it was illegal for the mortgage corporations to funnel profits to the government in the form of dividends.

In response, the companies’ preferreds tumbled an average of 66% at the open, then took back half of that before closing down about 59% for the day, a market source said.

“To put that in dollar terms, it probably means the paper loss out there is close to $6 billion,” he said. “Big losses there.”

Overall, the preferred stock market was off by about 13 basis points on the day, or about three cents.

“Things were definitely more active than they have been,” he said.

On Wednesday morning, Aegon NV’s 6.375% perpetual capital securities dipped 8 cents to $25.36.

Morgan Stanley Capital Trust VII’s 6.6% capital securities rose 2 cents to $25.23.

And Barclays Bank plc’s 8.125% non-cumulative callable dollar preference shares, series 5 ADR, moved up 4 cents to trade at $26.01.

Qwest Corp.’s new $500 million issue of 6.875% $25-par senior notes due 2054 traded Wednesday at $24.39, up from Tuesday’s $24.35 but dipping from Monday’s $24.40, a market source said.

The Monroe, La.-based telecommunications company has two 7% issues coming due in 2052, one in April and one in July. Both were recently spotted trading above par.

At the close, Citigroup Capital XIII’s series N preferreds were off 6 cents to close at $26.86 on 533,000 shares traded.

And DTE Energy Co.’s preferreds ended the session at $23.14, off 3 cents on 414,000 shares traded.

In other news on Wednesday, NEAH GES USA Inc. (GES) announced plans for an issue of $100 million of securities including preferred stock and new senior notes maturing in 2019 and 2024.

The proceeds from the senior Rule 144A and Regulation S notes will be used to fund the proposed acquisition of South Africa-based Quemic’s operations in Ghana and Mozambique, to acquire United Kingdom-based Graspon Frankton Maritime and to purchase Bell twin engine 412 utility helicopters.

NEAH USA is part of Dubai-based NEAH Global Energy Solutions (GES), a power generation, infrastructure, maritime, aviation and logistics provider based in Dubai.

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