Firmer market tone boosts preferreds; Ally attempts to recover losses; new issues rebound

By Stephanie N. Rotondo

Portland, Ore., Nov. 2 - Preferred stocks rebounded slightly on Wednesday after two straight sessions of declines.

However, "there was no real news to drive it up," a market source said. "The economic news was OK." Other than that, there was "modest to negative news out of Greece."

Therefore, he opined that the modest rally was simply "a reaction to two significantly down days."

He also noted that volume was quite low.

"We're in limbo," said another market source, waiting to see what will happen with Europe's financial crisis.

The positive turn helped some names like Ally Financial Inc. regain some losses, though not much. Ally's issues were both down over 5% on Tuesday and earned less than 1% back on Wednesday.

Recent new deals also experienced an uptick thanks to the generally upward movement of the market. A market source said Goldman Sachs Group, Inc.'s recent "baby bond" issue "popped back up," and CubeSmart was also higher.

Ally recoups some losses

The firmer tone of the market helped Ally Financial's two issues of preferreds recoup some losses, albeit barely.

The 8.125% series A trust preferreds (NYSE: ALLYPA) rose a nickel, or 0.25%, to $19.90. The 8.5% series B preferreds (NYSE: ALLYPB) meantime gained 17 cents, or 0.93%, to close at $18.39.

Both issues lost more than 5% in the previous session.

Also heading to higher territory were Bank of America Corp.'s 8.2% series H depositary shares (NYSE: BACPH). They moved up 8 cents to $23.72.

JPMorgan Chase & Co.'s 7.2% fixed-to-floating capital securities (NYSE: JPMPB) closed up 6 cents at $25.28.

Among foreign issuers, ING Groep NV's 7.375% perpetual hybrid capital securities (NYSE: IDG) improved by 15 cents, ending at $19.89.

New issues rebound

A market source said Goldman Sachs' $500 million issue of 6.5% $25-par notes (NYSE: GSJ) "pulled back with the rest of the market" during trading earlier in the week. On Wednesday, the issue "popped back up" to $24.75 bid, $24.80 offered.

The notes closed at $24.76.

CubeSmart's recent issue of 7.75% series A cumulative redeemable preferreds meantime finished up better at $24.80.

"All [new issues] are pretty much sitting there below par or at par," the source said.

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