Preferred market dealings remain muted; Ally active, better post-earnings; Regions rises

By Stephanie N. Rotondo

Phoenix, Nov. 2 - The preferred stock market was ending the week as it began: slow.

"There's nothing new on the horizon," a trader said, speculating that the primary market could get back in the swing of things next week. The calendar has been nearly bare all week due to Hurricane Sandy.

Ally Financial Corp. was topping the day's most-active list as the company reported improved results for the third quarter. The preferreds ended the session in higher territory.

Meanwhile, Regions Financial Corp.'s recent $500 million issue of 6.375% series A noncumulative perpetual preferreds was moving higher, just one day after the company said it would use proceeds from that offering to redeem its 8.875% trust preferreds.

Ally firms on earnings

Ally Financial's 8.125% fixed-to-floating rate trust preferreds (NYSE: ALLYPA) were quite active Friday, with more than 2 million shares changing hands.

The surge in activity came as the company reported a swing to profit for the third quarter.

The preferreds ended the day up 30 cents, or 1.15%, to $26.45.

The 8.5% fixed-to-floating rate perpetual preferreds (NYSE: ALLYPB) were not as active, but were moving up, gaining 18 cents to close at $25.32.

For the quarter, Ally reported net income of $384 million, versus a net loss of $898 million the quarter before and a loss of $210 million for the third quarter of 2011.

"Results for the quarter were driven by continued strong and stable performance in the Global Automotive Services business, resulting from earning asset growth from a more profitable origination mix, despite intensifying competition for auto finance assets," the company said in a press release. "Performance was also impacted by strong gain on sale revenue and favorable mortgage servicing rights activity, net of hedge, in Mortgage Operations."

Cash and equivalents were ample at $17.2 billion as of Sept. 30, compared to $16.1 billion as of June 30.

Regions' new issue rises

Regions Financial's recent 6.375% series A noncumulative perpetual preferreds - a deal that priced Oct. 25 - gained ground in Friday trading.

A trader pegged the issue at $24.85 at midday, up from $24.80 just 24 hours prior.

The issue was moving higher ahead of the company's planned redemption of its 8.875% trust preferreds.

The TruPs (NYSE: RFPZ) meantime were down 11 cents at $25.46.

That issue will be redeemed Dec. 3.

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