Citigroup preferreds end mostly stronger on dividend declaration; new issues close week mixed

By Stephanie N. Rotondo

Portland, Ore., May 13 - Citigroup Inc.'s preferreds closed Friday's session mostly higher after the company officially declared a dividend on its common equity.

Among recent new issues, United States Cellular Corp.'s new $25-par notes gave up some previous gains as the bid side fell to just below par. The issue had previously been one of the volume leaders in the preferred market and had been steadily climbing upward.

On the other hand, Hersha Hospitality Trust's recent new issue finally broke par in Friday trading. Traders had told Prospect News that the deal was on the quiet side and not really generating much interest.

Gulf Power Co., a Southern Company, also saw its new "baby bonds" - a deal that priced Thursday - trending higher.

Citi gains on dividend

Citigroup's preferreds were mostly higher as the New York-based bank declared its first common-stock dividend in more than two years.

Citi's 8.5% series J preferreds were one of the most actively traded securities of the day, according to a preferred market source. The shares gained 6 cents to close at $26.48.

Another source saw the 8.5% series M preferreds and the 6.1% series R preferreds gaining the most. Both issues earned 11 cents to close at $26.54 and $23.81, respectively.

On Friday, Citigroup said it would pay a penny-per-share dividend on its common stock on June 17. The dividend reinstatement comes after the company completed a 1-for-10 reverse stock split.

New issues mixed

In the new issue space, U.S. Cellular's 6.95% $25-par senior notes fell to $24.97 bid, $25.00 offered from $25.00 bid, $25.05 offered previously, a trader said.

Another trader quoted the issue at $24.97 bid, $25.03 offered.

Hersha Hospitality Trust's new 8% series B perpetual cumulative redeemable preferreds, however, traded up to par, or $25.00.

A second source pegged the preferreds at $24.90 bid, $25.00 offered.

The Hersha deal had previously been largely inactive, while U.S. Cellular's new bonds were performing quite well.

Also among new issues, Gulf Power's 5.75% series 2011A senior notes - a $125 million deal that priced Thursday - traded up to $24.95 bid, $24.97 offered from $24.85 bid, $24.90 offered.

At another shop, the notes were seen at $24.95 bid, $25.00 offered.

Ally moves up

Ally Financial Inc.'s two series of preferreds - the 8.125% series A and 8.5% series B preferreds - continued to be among the most actively traded issues.

A source saw both issues moving higher, the As gaining 6 cents to end at $26.25 and the Bs earning a dime to close at $26.45.

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