Midday Commentary: Gabelli Equity Trust, Resource Capital plan new issues; Apollo lists on NYSE

By Stephanie N. Rotondo

Phoenix, Sept. 24 - Preferred stocks were "pulling back a little bit," a trader said midday on Monday.

Though the market was coming in, that wasn't stopping the primary from kicking out new deals.

Gabelli Equity Trust Inc. announced plans to sell at least $50 million of series H cumulative perpetual preferred stock.

Price talk is 5% to 5.125%, according to a trader.

The trader said the new issue "should do well." The company's existing preferreds are rated A1 by Moody's Investors Service.

He saw the paper at $24.80 in the gray market as of midafternoon.

Bank of America Merrill Lynch is the bookrunner. Gabelli & Co. Inc. is the co-manager.

Proceeds will be used to redeem the company's 6.2% series F cumulative preferreds. Any remaining funds could be used for further preferred redemptions.

The company announced on Aug. 16 a partial call for the series F preferreds. It will redeem $53 million of the preferreds on Wednesday.

The preferreds (NYSE: GABPF) were trading down 9 cents at $25.45 on Monday.

Gabelli is a non-diversified, closed-end management investment company based in Rye, N.Y.

Also, Resource Capital Corp. said it will issue series B cumulative redeemable perpetual preferreds. However, a trader said the deal had yet to launch as of midday, and he had not seen any markets in the name.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and MLV & Co. LLC. are the joint bookrunners. The lead manager is JMP Securities LLC.

Proceeds will be used for investments related to the company's business and for general corporate purposes.

Resource Capital is a New York-based specialty finance company focused on commercial real estate and commercial finance.

Among recent deals, Apollo Residential Mortgage Inc.'s $172.5 million of 8% series A cumulative redeemable preferreds officially listed on the New York Stock Exchange Monday.

The deal priced Sept. 13. The ticker symbol is "AMTGPA."

The issue was trading up 9 cents at midafternoon at $25.09.

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