New issue market picks up, two deals announced Monday; RBS trends higher on dividend halt

By Stephanie N. Rotondo

Portland, Ore., April 11 - A trader said it was a "mostly red" day for the preferred stock market on Monday, though he added that things were "not off by a lot."

The new issue market continued to speed up. Two new deals were announced on Monday alone. One was from Ashford Hospitality Trust Inc. and the other from Entergy Mississippi Inc.

Traders said both new issues were on the smaller size and neither was doing well in the gray market.

A trader said he heard price talk on Ashford's preferreds at 8.875%.

Another trader said the new preferreds were being offered at less 40, or $24.60.

One trader said that while he was in New York last week, he heard "rumors that we are going to see a busier new issue market." At least two new deals came last week as well, and both of those were from real estate investment trusts.

"The vast majority of new issuance is out of REITs," another trader said.

Meanwhile, Royal Bank of Scotland plc's preferreds were continuing to trade mostly better. A trader had seen some action in the shares on Friday and attributed it to the belief that new banking regulations in the United Kingdom will not be as restrictive as once thought. On Monday, a trader gave credit to an article published in Barron's on Saturday discussing RBS' dividend-suspension program.

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