Market slows down for long weekend; Qwest, AXIS Capital hit NYSE; Freddie, Fannie climb

By Stephanie N. Rotondo

Phoenix, May 24 - A preferred stock trader said it was slow-going on Friday, as many people were absent going into the three-day Memorial Day weekend.

"No one is around," he said.

Looking ahead to the next week, the trader said that the market would "probably see a slew of new deals.

"It looks like they're priming the pump for it," he said.

In recent deals, Qwest Corp.'s $750 million of 6.125% $25-par senior notes due 2053 were admitted to the New York Stock Exchange.

The deal priced May 14. The ticker symbol is "CTY."

At midday, the issue was trading at $25.01, compared to opening levels of $25.05. At the close, the notes were at $24.93.

Also listed were AXIS Capital Holdings Ltd.'s $200 million of 5.5% series D noncumulative perpetual preferreds, a deal that came May 13.

The ticker symbol is "AXSPD." The preferreds were trading at $24.78 at midday, up 28 cents from the previous close.

The paper went out at $24.85 as of Friday's close, up 35 cents, or 1.43%.

In the secondary, a trader said that Fannie Mae and Freddie Mac paper was "all popping" again. The securities had risen in the previous session on the back of a decent home sales report from the Commerce Department.

And, Ally Financial Inc. paper was busy, but weaker, as the market speculated that the company could redeem its TARP preferreds and go public.

Fannie, Freddie higher again

Fannie Mae and Freddie Mac preferreds continued to post gains following Thursday's home sales report from the Commerce Department.

Freddie's 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) gained 65 cents, or 11.13%, to $6.49. Fannie's 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) improved by 56 cents, or 10.04%, to $6.14.

And, Fannie's 8.25% series T noncumulative preferreds (OTCBB: FNMAT) put on 60 cents, or 8.7%, to $7.50.

In the report released Thursday, the Commerce Department said new single-family home sales rose 2.3% during April, bringing the total annual pace of sales to 454,000 units. The median sales price jumped 14.9% to $271,000.

Ally weaker

Ally Financial's $2.1 billion settlement with former mortgage financing arm Residential Capital LLC places the company on a path toward an initial public offering, or so the market chatter goes.

With the ResCap debacle behind it, the former GMAC could also be considering redeeming its 9% convertible preferred securities held by the Department of Treasury. The company would have to ante up $5.9 billion in order to do so.

While the long-term effects would likely be positive, such a potential outpouring of cash might have spooked investors, which then resulted in pressure being put on the company's publicly traded preferreds.

The 8.5% series A fixed-to-floating rate perpetual preferreds (NYSE: ALLYPB) dipped a penny to $27.00 a share. The 8.125% series 2 fixed-to-floating rate trust preferreds (NYSE: ALLYPB) dropped 8 cents, also to $27.00 even.

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