RBS stays busy as profit-takers emerge; Ally up on Treasury nod; no word on new Cedar deal

By Stephanie N. Rotondo

Portland, Ore., May 8 - Preferred stocks managed to end Tuesday's session flat to mixed, despite a big loss in the straight equities.

One market source noted that investors were continuing to focus on recent new deals and topical names such as Royal Bank of Scotland and Ally Financial Inc. RBS preferreds have been on the rise of late but came back in a little on Tuesday, which was blamed on profit-taking.

Cedar Realty Trust Inc. announced plans for a new issue early in the day. However, traders had heard little about it by the end of business and the deal did not price.

Rumors of a new deal from a utility company were also circulating. A trader said he had heard the deal was to come Tuesday, but as it did not come, he speculated that it could show up Wednesday.

"I think I heard something like that too," a source said.

RBS, Ally topical

Royal Bank of Scotland's preferreds ended their run up Tuesday, as profit-takers came in.

"There is clearly some reshuffling," a market source said.

The 6.6% series S noncumulative dollar preference shares (NYSE: RBSPS) fell a nickel to $18.39, and the 7.25% series T noncumulative preference shares (NYSE: RBSPT) dropped 17 cents to $20.28.

But the 6.4% series M noncumulative dollar preference shares (NYSE: RBSPM) did manage to put on 4 cents, ending at $17.76.

The Edinburgh-based bank's preferreds have been climbing recently, first on hopes of renewed dividend payments, then on elation when those hopes proved true.

Among other topical names, Ally Financial was up on the day as the U.S. Department of Treasury confirmed that it had given the company the OK to put its troubled Residential Capital LLC unit into bankruptcy, should that be the path taken.

The 8.125% fixed-to-floating trust preferreds (NYSE: ALLYPA) rose a nickel to $24.25, and the 8.5% fixed-to-floating perpetual preferreds (NYSE: ALLYPB) gained 11 cents, closing at $23.05.

No word on Cedar deal

Cedar Realty Trust announced an offering of 7.25% series B cumulative redeemable perpetual preferreds on Tuesday.

However, market sources said they had not heard anything on the new deal.

"It could just be a small deal that gets put away and no one sees it until it gets put on the exchange," one trader said.

Cedar Realty will apply to list the preferreds on the New York Stock Exchange under the ticker symbol "CDRPB."

MLV & Co. and Sandler O'Neill + Partners, LP are the joint bookrunners.

Proceeds will be contributed to the operating partnership in exchange for preferred units of limited partnership interest. The operating partnership will then use the funds to pay down its secured revolving credit facility.

Cedar Realty is a Port Washington, N.Y.-based real estate investment trust.

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