Ally/GMAC hybrids dominate trading but slip; recent SoCal Edison issue active but unchanged

By Stephanie N. Rotondo

Portland, Ore., March 9 - While a preferred stock trader noted that Wednesday was a "quiet day" with "no real news," he also said that it was a "fairly active day in capital securities."

Still, "the market was sort of mixed," he said.

Ally Financial Inc.'s GMAC Capital Trust I preferreds continued to trade in good amounts. However, the hybrid preferreds fell about 6 cents.

The weakness in the GMAC preferreds might have been due to weakness in the high-yield arena, the trader opined.

"The high-yield market is causing the capital securities/hybrid market to be a little bit weaker," the trader said.

Among other recent new issues, Southern California Edison Co.'s 6.5% perpetual preferreds were called active and about unchanged, while Pebblebrook Hotel Trust's new 7.875% preferreds were not garnering much attention.

GMAC hybrids slip

The Ally Financial-guaranteed GMAC Capital Trust I hybrid trust preferred securities, series 2, due 2040 were the day's most active securities, according to a trader, with some $80 million changing hands.

The trader said the preferreds fell 6 cents to $24.72.

The U.S. Department of the Treasury sold $2.67 billion of the hybrid trust preferreds March 2 at par of $25.00. Market sources have said that since hitting the market, the deal has done very well.

The preferreds have a dividend of 8.125% until Feb. 15, 2016 and then a floating rate of Libor plus 578.5 basis points.

Ally Financial, formerly known as GMAC LLC, is based in Detroit.

SoCal Edison active, steady

A trader said Southern California Edison's issue of 6.5% perpetual series D preference stock was trading actively, though about unchanged from Tuesday's closing levels.

The trader quoted the preferreds at par 1/8 bid, par 3/8 offered. On Tuesday, the preferreds had hit a high of par 7/8 before coming back in slightly.

"The deal looks attractive," the trader said.

The $125 million issue priced Monday at par of $100.00.

Meanwhile, Pebblebrook Hotel Trust's 7.875% perpetual series A cumulative preferreds - priced Tuesday at par of $25.00 - were seen trading between $24.90 and $24.97.

Weakness seen in market

Among the day's most actively traded preferreds were Fannie Mae and Freddie Mac - which trade at 5 cents on the dollar, according to a trader - as well as Wells Fargo & Co. and American International Group Inc.

Wells Fargo's 5.8% preferreds traded down an eighth to 91 1/8 on $45 million traded, the trader said. AIG's 8.175% preferreds were meantime "a little bit weaker" at 109¼ on about $18 million traded.

"They've been active for a number of weeks now," the trader said of the AIG paper.

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