Midday Commentary: Allstate at par post-pricing; Fannie, Freddie soften ahead of Obama speech

By Stephanie N. Rotondo

Phoenix, Aug. 6 - A preferred stock trader likened the day's activity to "slow water torture," as investors waited for the market to "either really sell off or for something to move the market one way or another."

He said Tuesday's session was starting out soft.

In the primary, the Allstate Corp.'s newly priced $800 million issue of 5.75% $1,000-par series B fixed-to-floating rate subordinated debentures due 2053 were trading around par, according to the trader.

The deal priced late Monday.

In the secondary, Fannie Mae and Freddie Mac paper was weakening as president Barack Obama prepared to give a speech in Phoenix in which he would outline his ideas to unwind the two agencies.

Obama reportedly supports bipartisan legislation currently in the Senate that proposes to end the two entities while also helping potential homeowners get into 30-year fixed-rate mortgages. House Republicans have introduced a bill that would also end Fannie and Freddie, but the White House and Senate groups claim it does nothing to ensure those fixed mortgages would remain available.

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