Preferred stock market loses ground; Southern California Edison deal gets market buzzing

By Stephanie N. Rotondo

Portland, Ore., March 7 - After ending last week on a positive note, the preferred market took a turn on Monday, according to a market source.

"There's a whole lot more red on my screen than green," he said.

Still, the more-active-than-usual new issue market continued to churn out deals, including one from Southern California Edison Co.

A preferred stock trader said he was hearing price talk on Southern California Edison's planned $125 million new issue of perpetual series D preferreds. Pricing came in at par of $100, and the preferreds were expected to carry a 6.5% yield.

"I was surprised the deal wasn't grown," he added, noting that he had heard the syndicate received interest for about double that amount.

Among other new deals announced Monday, the trader said the first-ever preferred issuance from real estate investment trust Pebblebrook Hotel Trust was being talked at 7.875% to 8%. The trader said the company was looking to raise $25 million via the sale of the $25-par series A preferreds.

"It's a small one-off deal, the trader said. "I don't think it will command a lot of attention."

Meanwhile, ING Groep NV said that it would repay the Dutch government about 40% of what it received in a government bailout. The company had previously attempted to call some of its outstanding preferreds but was unable to do so because of what it owed the government.

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