Midday Commentary: Citigroup to bring $1,000-par preferreds; Goldman's new issue losing ground

By Stephanie N. Rotondo

Phoenix, Oct. 22 - Citigroup Inc. announced a new preferred stock offering early on in Monday's session.

A trader said there was no selling group for the $1,000-par securities, which will be unlisted. He also noted that he had not seen any markets for the paper.

Price talk is 6.37% to 6.5%, according to the trader.

Citigroup Global Markets Inc. is the bookrunner and structuring coordinator. UBS Securities LLC is the lead manager.

Proceeds will be used for general corporate purposes.

Meanwhile, the Goldman Sachs Group Inc.'s recently priced 5.95% series I noncumulative perpetual preferreds continued to trade off Monday, continuing Friday's downhill slide.

A trader pegged the issue at par, down from just over par on Friday.

The deal priced on Wednesday.

Fannie Mae and Freddie Mac preferreds were trading busily following the publishing of an opinion piece in the Wall Street Journal. In the article, Jim Millstein, who oversaw the restructuring of American International Group Inc., gave his view on what has happened with the government-subsidized mortgage issuers and what should be done going forward.

A trader remarked that the preferreds "bounced up and then sold off" after the article was published.

The 8.375% fixed-to-floating rate noncumulative perpetual preferreds (OTCBB: FMCKJ) were trading at $1.62 at midday, up 22 cents, or 15.71%. Paper had been as high as $1.75 in early trading.

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